Table of Contents
- 1 Introduction
- 2 What Is Ethereum?
- 3 Is Now A Good Time to Buy Ethereum?
- 4 Which Do I Buy: Bitcoin vs. Ethereum?
- 5 What About Litecoin vs. Ethereum?
- 6 What About Investing In Ethereum?
IntroductionShould I buy Ethereum? This is a question most of us had at least once in our lives. Cryptocurrencies have captured our attention and refused to let it go. No matter where you go, you can’t avoid hearing about them. Ethereum is one of the biggest cryptocurrencies in the world. It’s discussed on TV, the Internet, around water coolers at work and coffee shops all over the world. In this crypto-crazed world, you can’t help but ask yourself, “Should I buy Ethereum or some other cryptocurrency?” This is the question this tutorial aims to answer. Or at least give you the information to decide for yourself.
What Is Ethereum?Ethereum is one of the biggest players in the cryptocurrency market. It’s a blockchain platform. Ethereum generates the second most valuable cryptocurrency in the world, Ether (ETH).
It sounds complicated, yet it’s not. Imagine, you give a friend $1. For it, he promises you an ice cream cone tomorrow. The next day comes, the friend tells you that he doesn’t have the ice cream and can’t get it. You have to trust that your friend’s telling the truth. Later, you see the same friend, eating a decadent ice cream cone. He lied to you. You feel betrayed. When you confront him, the friend denies getting the $1 bill from you the day before. It is his word against yours. This is the simplified situation the Ethereum blockchain solves.Bitcoin.
The first step in answering the “Should I buy Ethereum?” question is to know what it is. To make an informed decision, however, there still are a lot of things to cover, so keep reading.
How Is Ether Mined?To keep the blockchain secure, it encrypts every transaction that happens on it. Then, the blockchain updates the ledgers all over the world.
The system records every change in blocks. When one block reaches its capacity, the blockchain creates another one.Ether is mostly mined using the GPU (Graphics Processing Unit) and specialized ASIC machines. Most Ethereum mining operations reach the industrial scale. Solving difficult puzzles to make Ether requires your system to run full throttle at all times. It costs a lot in electricity bills. The hardware wears out much faster than usual too. Have you ever grumbled about insane GPU prices? Now you know why they are like that. Supply falling behind the demand = skyrocketing prices. It’s capitalism at its best. So, when you ask yourself, “Should I buy Ethereum or mine it?”, the answer is likely going to be to buy it. Unless you can invest a fortune in building your own mining facility.
Ethereum Transaction SpeedsScaling is one of the biggest obstacles to the adoption of blockchain technology. More transactions = longer wait for the blockchain to catch up and process them all Centralized competitors can offer faster transactions when compared to the blockchain.
Ethereum SafetySafety is one of the greatest Ethereum selling points. The apps built on this blockchain (called dApps or decentralized apps) are significantly safer and more resistant to hacking than the software you use now. For all intents and purposes, it’s impossible to mess with the Ethereum ledger. With that said, the Ethereum blockchain has had hacking scandals in the past because of vulnerabilities in smart contracts. The most famous one is the DAO hack, where a badly-written smart contract resulted in around $50M-worth of Ether falling in danger of being stolen. To get around the issue, the Ethereum blockchain users voted and changed the rules governing the system. They performed a “hard fork” and split the Ethereum system into two competing systems, Ethereum and Ethereum Classic.
The answer to the question, “Should I buy Ethereum?” is currently “Maybe, depends.” You need to know more before you go out (or online in this case) and decide on doing it. The next section will help you make a more informed decision.
Is Now A Good Time to Buy Ethereum?The answer to the question, “Should I buy Ethereum?” is often yes. It’s one of the most popular and well-known cryptocurrencies in the world. But. It’s much more difficult to answer a more advanced question, “Should I buy Ethereum now?” Read on to learn how to judge for yourself.
Recent Ethereum Price ChangesAt the time of writing this sentence (September 26, 2018), the price of 1 ETH is $214.26, according to ethereumprice.org. By the time I finish this section, the ETH price could be very different. This is why it is hard to answer the “Should I buy Ethereum now” question with an unambiguous “Yes.”
How Do I Find Recent Ethereum Price Changes Myself?There are several ways to check the price of Ether yourself and see how it changes over time. There’s the ethereumprice.org mentioned above, ETHnews.com, CoinDesk, and many more. Find the one you like the most. Many cryptocurrency price tracking tools can show Ether’s price in real time.
How Do I Decide If I Should Buy Ethereum Now?The answer to the question, “Should I buy Ethereum now?” is “Yes,” if you believe in the principles behind its coin, Ether. Before you decide to buy in, you should know that many people say that Ether’s price will keep dropping. There are just as many saying that the current price slump is a phase and Ethereum will recover by the end of 2018. When asked, “Should I buy Ethereum now?”, numerous Ethereum pessimists say that it’s not worth it. According to them, it’s better to get smaller coins. They expect to take these smaller coins to the not-bank when they blow up in value. The pessimists do have a point in some of their arguments. They criticize the slow Ethereum transaction speed and increasing supply. Ethereum enthusiasts point to Vitalik Buterin’s statement that it is a good idea to drop Ether issuance to zero in time. It would stop Ether supply from growing and raise the price. Because of supply & demand. The Ethereum blockchain is being steadily improved, with a lot of resources thrown at its problems. To answer the essential question of “Should I buy Ethereum now?” for yourself, think of it like a basketball game. You can choose a promising, yet utterly unproven rookie for your team. He may become LeBron James in the future or get injured and never reach his potential. These are the promising smaller coins, the “next Ethereum.” Or. You can choose a proven veteran with a team of personal coaches who are helping him improve every day, even though the hype has died down. In other words, Ethereum.
Which Do I Buy: Bitcoin vs. Ethereum?If you’ve heard about other coins than Ethereum, like Bitcoin, you may have asked yourself, “Should I buy Bitcoin or Ethereum?” We can help you choose.
What Is Bitcoin?
Just like Ether, Bitcoin is a top cryptocurrency. It’s the first one ever released. Satoshi Nakamoto, an anonymous person or group, created Bitcoin in 2009. From the beginning, it was open source, meaning everyone can see its code. Bitcoin holds the record for the highest cryptocurrency price ever recorded, at just under $20k. Since that crazy time, the price has dropped. It’s around $6.5k at the time of writing. Price could tilt your answer to the Should I Buy Bitcoin or Ethereum dilemma to either side. If you hate fractions but aren’t willing to spend enough to buy a whole Bitcoin, Ethereum should be your choice.
What Are The Differences Between Bitcoin and Ethereum?The biggest difference between Ethereum and Bitcoin is the purpose of the two coins.
The DilemmaWhen you ask yourself, “Should I buy Bitcoin or Ethereum”, consider these things to come up with an answer:
- Bitcoin is for paying, Ethereum is for smart contract-fueled dApps.
- Bitcoin is almost three times more expensive but also the most well-known cryptocurrency in the world.
- Both aren’t very fast to move because of scalability problems.
- Which use of blockchain technology attracts you more? Liberated currency or secure apps?
What About Litecoin vs. Ethereum?
What Is Litecoin?When you ask yourself, “Should I buy Litecoin or Ethereum?”, you’re asking what is more valuable to you:
- Smart contracts
- Cheaper and faster (than Bitcoin, at least) payment
What Is the Difference Between Litecoin And Ethereum?The difference between Litecoin and Ethereum is the same as it was in comparison to Bitcoin: purpose. The answer to the question of “Should I buy Litecoin or Ethereum?” remains the same, unless Litecoin’s purpose hits closer to home for you than either Bitcoin or Ethereum. The Bitcoin’s two biggest weaknesses—slow transaction speed and price—are considerably lessened with Litecoin.
Litecoin is much cheaper than Bitcoin, costing around $57 per coin. Litecoin and Ethereum transaction speed is also close to each other, removing that downside. So, what about it?
Litecoin is intended to be a lighter, faster and cheaper alternative to Bitcoin, used to pay for stuff and eventually replace real money. When you ask, “Should I buy Litecoin or Ethereum?”, I answer: Which idea attracts you more, small payments using cryptocurrencies or secure apps? If it is payments, go with Litecoin. If it is decentralized apps, choose Ethereum.
What About Investing In Ethereum?We have previously discussed buying cryptocurrencies, trying to help you reach the answer to questions like “Should I buy Ethereum now?”, Should I buy Bitcoin or Ethereum?”, and “Should I buy Litecoin or Ethereum?”. We did not talk about what you should do with it once you have it. By a vast majority, most cryptocurrency sales happen for investment reasons. There is a good chance that you have heard stories about people who jumped on the Bitcoin hype train early and became millionaires at 19. Before you decide to try it for yourself and while you’re still asking, “Should I invest in Ethereum or some other cryptocurrency?” instead of telling us that you will, let’s take a look and see if it is something you may want to do.
What Is Short-term Investing?Short-term investing, or flipping, is the act of buying something and hoping to sell it soon, for a profit.
What Is Long-term Investing?As the name implies, long-term investing is like its short-term cousin. The difference is that it’s all about long-term profit. Long-term investing requires careful research because the scale of your investment is usually much bigger. This kind of investment also requires even more nerve. It’s much harder to watch your chosen cryptocurrencies’ prices fall, holding on to them, for weeks, months or even years. You have more to lose and more to gain investing long-term as well.
So, Should I Buy Ethereum?One of the most successful investors in the world, Warren Buffet, summed up his investment strategy like this: “It’s far better to buy a wonderful company at a fair price, than a fair company at a wonderful price.” Mr. Buffet also favors long-term investment opportunities, saying: “Only buy something that you’d be perfectly happy to hold if the market shut down for ten years.” With that said, Warren Buffet doesn’t believe in cryptocurrencies himself.
- You believe that Ethereum is a wonderful cryptocurrency.
- You would be perfectly happy owning Ether if the price dropped to $0 and stayed there for ten years.