Ethereum is skyrocketing. How does it compare to Bitcoin and should you invest in it?
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From Morning Cents Jan 4, 2021:
Many are also asking about the recent run up in Ethereum (more correctly Ether or ETH), which has now hit over $1,000. In reality, if you look at the chart, ETH’s run up is mostly from its correlation with Bitcoin’s run up, and the value of ETH to BTC has remained relatively steady, at least for now.
Ether (ETH) is a cryptocurrency used in the Ethereum network, which is the largest decentralized smart contract platform. Basically, the Ethereum network allows software applications to run in a decentralized manner on its virtual machine. ETH is the currency paid by applications in exchange for the network running it.
Think of ETH like oil. The more automobiles and machines that use oil compared to its supply, the more valuable oil becomes. In a similar way, the more applications that are running and being used on the Ethereum network, the more valuable ETH becomes. If you believe Ethereum will grow in popularity and many apps will soon be hosted there, ETH looks attractive.
I have held ETH since mid-2017, but in much smaller quantities than Bitcoin since there is much more one needs to believe in order to be confident about the investment. An investment in ETH not only relies on cryptocurrencies gaining popularity, but also decentralized applications becoming popular and Ethereum becoming the network that ultimately wins (vs Cardano, EOS, etc.). I like it as a speculative bet if you like the decentralized applications trend, but it carries too much uncertainty to be a large position.
Timestamps:
0:00: Intro
1:40: Blockchain & Proof of Work
3:54: Ethereum Explained
5:32: Decentralized Apps
7:01: Ethereum Team
7:42: Should You Buy ETH?
10:28: How to buy ETH