Whenever there is a talk about Bitcoin or cryptocurrencies, you will hear about Ethereum and smart contracts. You can call Bitcoin as the King of the cryptocurrency market and Ethereum as the father of smart contracts.
You may hear from reputable sources that many new innovations and cryptocurrency projects were built on Ethereum blockchain. Let’s find out Is it still worth to invest in Ethereum Now?
You need a basic understanding of the Blockchain and cryptocurrency market to fully understand this post. In this post, we will cover What is Ethereum 2.0? Why is Ethereum valuable? Should you buy an Ethereum in 2020 or it’s too late? The post includes:
- What is Ethereum?
- What is Ethereum 2.0?
- Why Should I Buy Ethereum in 2020?
- Reasons Not to Buy Ethereum
- Is This the Best Time to buy Ethereum?
- Where Can I Buy Ethereum?
- Ethereum or Bitcoin? Which One is Better
- Should I Buy Other Coins than Ethereum?
- How Much Ethereum Should I Have?
- Will Ethereum Makes Me a Millionaire?
What is Ethereum?
Ethereum is an open-source, public blockchain-based platform. Ethereum introduces the concept of smart contacts. Smart contracts are protocols defined by the developer to do some specific tasks. Anyone can create their own smart contracts on the Ethereum Blockchain with a very little fee. Ethereum is different from Bitcoin however both of these are based on Distributed Ledger Technology (DLT) Aka Blockchain.
Ethereum code was initially introduced by the developer named Vitalik Buterin. Ethereum was first introduced to the public at the North American Bitcoin Conference at Miami in January 2014.
Here is a small explanation of how Ethereum different from Bitcoin. Assume Bitcoin is a calculator app in your smartphone which is good for all mathematical problems but you can’t do anything else than mathematics. On the other hand, Ethereum is the smartphone in which you can install different applications according to your needs and requirements. The smartphone is able to install as many applications as you want.
Ethereum allows anyone to create Dapp (decentralized app) on the ethereum blockchain. Dapps are changing the world of the Internet, now you can spare your computation power to earn some money, use your content and monetize it and many more things.
Bitcoin is the first version of Blockchain known as Blockchain 1.0. Ethereum is the second version of Blockchain known as Blockchain 2.0. Read about the difference between the blockchain versions here.
Now you know Etherem provides more functionality and scalability than Bitcoin. Let’s find out what is waiting for you in 2020? Ethereum 2.0 is here soon.
Ethereum 2.0 is totally different from Ethereum 1.0. Ethereum 2.0 is fast, more scalable and energy-efficient than ETH 1.0. ETH 2.0 will run on Proof-of-Stake (PoS) algorithm, have a sharding chain and new virtual machine eWASM. The ETH 2.0 is the biggest update for Ethereum and will be rolled out in phases.
The ETH 2.0 will launch in 2020. There are three major phases that the developers are working on. Let’s discuss the three phases one by one.
The major three phases are:
- Beacon Chain
- eWASM (Ethereum Virtual Machine)
The name of the first phase is Beacon Chain. Beacon chain is the main chain of the proof-of-stake (PoS) network. The beacon chain is different from Ethereum current chain and ETH 2.0 will be a different coin that runs on the proof-of-stake algorithm.
ETH2 a new token that will be given in 1:1 to Ethereum holders. The ETH2 token will be used by the validators to verify the transactions and add them to the beacon chain. The validators need to stake ETH2 tokens to be eligible for verifying the transactions. The minimum amount of ETH2 tokens needed to become a validator is 32 ETH2 tokens.
Whenever a transaction is made on the beacon chain, a random number of validators are selected to verify the transactions. The validators vote whether the transaction is valid or not. If the transaction is approved by the majority of the validators then the transaction is added in the blockchain.
The beacon chain does not support smart contracts and ERC tokens in the beginning. The beacon chain only used for the transactions of ETH2 tokens. Smart contracts and ERC token deployment will be added in the next phases.
When phase 1 is completed and the beacon chain is successfully developed there will be two Ethereum chains. Just for clarification lets call them ETH1 (the main Ethereum chain that runs on PoW) and ETH2 chain (New beacon chain runs on PoS). Users can swap their ETH coins to ETH2 tokens and become validators. Once the ETH coin is swapped in ETH2 users can’t claim back ETH coins, the ETH coins are burned using a smart contract.
Shard chains are the key to achieve unbelievable scalability. Sharding means dividing large data into smaller parts that are faster, easy to handle called shards. The word shard means small parts of something.
The ETH2 network is divided into small chains called sharding chains. Each sharding chain works parallel to each other. A group of random validators is selected for each shard chain, the group will add new transactions in the sharding chains.
The sharding chains then added on the beacon chain and the transactions in the shards are marked as confirmed transactions. The shards are cross-linked with the beacon chain. The beacon chain selects random validators for each shard chain and the validators are unknown to each other.
ETH1 and ETH2 will operate in parallel with each other. ETH1 chain will be untouched and all the implementation and experiments are done on the ETH2 chain. The block reward is given to both ETH1 (proof-of-work miners) and ETH2 chain (proof-of-stake). This will initially result in an increase in the inflation rate of Ethereum but that will settle to around 1% because the ETH1 (PoW) chain is gradually de-emphasized.
eWASM ( Ethereum flavored WebAssembly )
eWASM is the new virtual machine for the ETH 2.0. This is a set of instructions and protocols that will allow smart contracts and dApps on the ETH 2.0 chain.
This is the last phase for the Ethereum 2.0 and will be implemented after sharding chains. When everything will work fine in sharding chains then developers will roll out the eWASM phase and start developing smart contracts on the new Ethereum blockchain.
eWASM allows developers to run smart contracts and dApps on different sharding chains, the smart contracts that will be only designed for a special shard chain and will only affect the chain transactions. A dApp needs to choose on which shard chains it wants to be on.
The beacon chain will be supposed to be released in early 2020. After beacon chain sharding and eWASM will be implemented in 2020 and 2021. The complete Ethereum 2.0 product will be launched in 2021 or later.
Become Early Adopter
Ethereum is a new technology and has a lot of room for growth. In the above image, you can see that only 16% of the investors invest in the technologies in the early stages and makes a handsome profit. There is always a risk for early adopters but the reward is also big.
Ethereum 2.0 is the beginning of new technology. Ethereum 2.0 will connect the world and businesses with each other by smart contracts and dApps. The technology can change the world and makes it a better place, don’t forget or afraid to become a part of it.
A good investor always diversifies their portfolio. Bitcoin isn’t everything, adding Ethereum to your portfolio will make it stronger and promising in the upcoming years.
Ethereum Will Tokenize the World
The World Economic Forum (WEF) publishes a report that shows around 10% of global Gross Domestic Product (GDP) will be stored and transacted with the help of blockchain technology by 2025.
That means each country will use blockchain technology up to 10% of its GDP. Everything will be tokenized, here are a few examples:
Tokenization of artworks: People start using blockchain technology to own and publish artwork.
Personal Documents: Birth Certificates, health care records, driving license, and other documents are stored on Ethereum blockchain using tokenization. People can prove that the documents belong to them on the Ethereum blockchain.
There are always two sides to any decision. It is unfair to look at only the positive side and make a decision. When you read a blog or watch a video they always say “I am not a financial advisor…………. Do your own research” this is what they mean. There are some things that you keep in mind before investing in Ethereum.
Ethereum was the first that introduced smart contracts but now there is a lot of coins that allow smart contracts on their chains. The cryptocurrency market is flooded with altcoins claiming they are better than Ethereum.
Some examples of ETH killers are Cardano (ADA), EOS, Cosmos (ATOM). To date, none of them really proved themselves that they are better than Ethereum. Cardano is still struggling to release its main net, EOS does not get the exposure that the Ethereum network has.
As we have explained above the Ethereum 2.0 blockchain is run on the proof-of-stake algorithm. A group of random validators will add transactions to the network. Sharding will divide the network into smaller chains and gives the control to maintain and verify the transactions to a very small group of validators.
The validators may combine with each other and manipulate the network transactions. More number of sharding chains means there are more chances of network compromise. The Ethereum developers are still working on this to make the network secure and scalable.
Is This the Best Time to buy Ethereum?
Yes! Ethereum is trading around $140 (at the time of writing) and this is a good buy.
The 2017 bubbe was popped out and the price is now reflecting the real use cases and adoption. Ethereum has also countered many problems like power consumption, slow network speed, scalability issue, and difficulty bomb. That’s why the Ethereum developers and foundation is working on Ethereum 2.0, which will solve the problems.
The founder and CEO of Ethereum Vitalik Butrein said that they will launch Ethereum 2.0 in 2020 that will be “1000x more scalable and 99% energy efficient”. Is it really feasible?
Ethereum has more developers than other Ethereum Killers
There are many other altcoins that claim they are capable of fast transactions and scalable than Ethereum but none of the Ethereum Killers are able to show their powers yet. The reason for that is they don’t have enough developers to build the blockchain features.
On the other hand, Ethereum has the maximum number of developers in altcoins. Ethereum has more than 250,000 developers that are currently contributing to the network and have 14,000 repositories on Github.
Metamask the browser extension that helps you to receive and send Ethereum in one click has now more than 1 Million users. Ethereum remains the best Dapp platform and research shows that 94 out of 100 blockchain projects are built on the Ethereum chain.
Where can I buy Ethereum?
There are many cryptocurrencies exchanges that allow you to buy Ethereum.
Choosing a cryptocurrency exchange is really hard because there are too many of them and every exchange claims its better than the rest of them. Some of the cryptocurrency exchanges run away when they don’t get the required userbase and trading volume.
Security is another concern when selecting a cryptocurrency exchange. You should select an exchange by seeing its history and team background. Cryptopia is a great example of security issues, the exchange got hacked back in Mid January 2019 and they are unable to return user’s funds. All the funds of users are frozen and the exchange is still not opened.
Bitcoinik team is working hard to find the best and legit crypto currency exchanges for you. You should use one of the best cryptocurrency exchanges that we mentioned in the below post.
There is always this fight between the investors/community which one is better Ethereum or Bitcoin?
No doubt, Bitcoin is better than Ethereum. Bitcoin is the king of the crypto market and always remains the king. The Bitcoin blockchain is the strongest chain in the crypto market and no other coin blockchain has a stand against it. Bitcoin has the highest hash rate and miners in the crypto community that makes it the non-hackable currency.
Ethereum has its own advantages and features like fast transactions, smart contracts and dApps but it is still no match for Bitcoin. The community of Bitcoin is much stronger than Ethereum that does not mean that they don’t like Ethereum. Ethereum will always be the investor’s second choice after Bitcoin.
The short answer to this is Yes. There is a saying never put your all eggs in one basket. Diversifying your portfolio is a better option to deal with every situation of the market.
The key highlighted altcoins of the above post are:
Binance Coin (BNB): The native token of the leading cryptocurrency exchange Binance.
Basic Attention Token (BAT): The token is used in Brave Browser that is gaining good popularity.
XRP: Used in Banking and Financial Services
Monero (XMR): Called as Anonymous, Privacy Coin used on the deep web markets
Don’t over diversify your portfolio that will also damage your investments. We recommend you to hold at least 50% of your portfolio in Bitcoin and USDT (Tether). If you do that you can always take advantage of the short term opportunities.
How Much Ethereum Should I Have?
This is a tricky question. The answer totally depends on individuals. We will help you to find out how much Ethereum you should buy?
First, figure out how much money you are comfortable to invest in the cryptocurrency market. Don’t invest more than you can’t afford to lose. Don’t invest your life savings and borrowed money, the cryptocurrency market is highly volatile and you will end up in losing everything.
Set a buying limit for every altcoin and don’t buy when the price is skyrocketing. You should wait for the market to bottom out and buy coins in small portions. Always place buy orders and don’t see the price daily, if you do so that will make you panic and you will make wrong decisions.
As we have discussed above don’t invest all the money in one Coin. Always Diversify and you will be happy at the end of the story.
Probably Yes! That depends on the amount of Ethereum you are holding and at which price you pick it up. Ethereum is a very good coin and has the potential to give a big return in the upcoming years. Ethereum 2.0 will be launched in 2020 and that will make the network more secure and scalable allows it to use by the many big companies and people.
The best results always need patience. There will be some ups and downs in the short term but if you want to maximize your profits, we recommend you to hold Ethereum for at least the next 2-5 years. It is always the entry and exit that matters.
If you have read the full article, you will now know the advantages of Ethereum 2.0 and also knows where to buy them. You should make a decision by keeping everything in mind. Ethereum 2.0 is not a one day task, it will take 1-2 years for fully implementing the features. If you are planning to buy Ethereum, we recommend you to hold until 2022 for the best results. Keep Investing until you retire