Ethereum is a decentralized and open-source blockchain that was created back in 2015. Its cryptocurrency is called Ether (ETH). It is currently the second largest cryptocurrency after Bitcoin. As a crypto, it is more powerful and has more potential than Bitcoin (BTC) due to its smart contract functionality. Bitcoin, Tezos, and Ripple also have smart contracts, but the framework is not as robust as Ethereum. Since Bitcoin has a limited supply of $21 million Bitcoin and Ethereum does not currently have a cap, the law of supply and demand makes Bitcoin much more expensive. In 2020 alone, the price of Ethereum increased about 550%. On February 12, 2021, Ethereum hit a new record price of $1877.88. Bitcoin is currently nearing $50k. Many analysts who believe in Ethereum expect it to reach a price of $9000-$10,000 within the next 5 years. But why?
Smart Contracts
Smart contracts are transactions protocols that automatically execute and document a contract as per the terms of the agreement. Ethereum runs these smart contracts on what they call the Ethereum Virtual Machine (EVM). The EVM is like a supercomputer built on the blockchain. The purpose of a smart contract is to reduce the need for the middle man (intermediators), arbitrations, fraud losses, and more! Smart contracts could potentially replace thousands of jobs globally, attracting many corporations to Ethereum.
Ethereum 2.0
Ethereum 2.0 is an upcoming upgrade. Phase 0 was released in December of 2020. Phase 1 and 2 are expected sometime in 2021. This upgrade will increase transaction throughput from a current 15 transactions per second to a potential thousands of transactions per second. In its current state of 15 transactions per second, it is much faster than Bitcoin’s 4.6 transactions per second, but slower than VISA’s average 1700 transactions per second. Ethereum 2.0 expects to surpass VISA and MasterCards’s transaction processing abilities, giving vendors instant confirmation that a payment was made.
How to buy Ethereum and Bitcoin
There are many cryptocurrency-based brokerages out there. The most popular is Coinbase and Coinbase Pro (free). Want $10 in free Bitcoin? Join Coinbase through my referral link. Coinbase is expected to go public with their IPO in March, which means you can buy shares in Coinbase soon. Coinbase will be listing on Nasdaq and is expected to be one of the fastest growing stocks of 2021. Want to earn up to 8.6% interest on your crypto and get up to $250 in Bitcoin when you sign up and transfer your crypto? Then join BlockFi through my referral link to start earning your interest and free bitcoin. Not sure how to properly buy or use crypto? Click Here to read my detailed post explaining how to buy and manage your first crypto. You can also buy Bitcoin and other crypto’s through regular brokerages like Robinhood, but there are limitations. With Robinhood or Webull, you can buy and sell limited selections of crypto with ZERO fees, but you cannot transfer Bitcoin to another wallet or earn interest with a crypto account like BlockFi.
Ethereum in 2021 and Beyond
I am one of the believers of Ethereum and decided to invest early January 2021. Unfortunately I missed out on the huge growth of 2020, but I already made just over $1200 in the first 40 days of 2021 plus just over $17 in interest with BlockFi. Will Ethereum grow to $10,000 within the next 5 years? Nobody really knows and it is difficult to analyze.
I do know this.
- Good news for any crypto generally helps out other crypto’s.
- Square (SQ), owner of CashApp, bought 4709 Bitcoins for $50 million and made Bitcoin available on CashApp. Join CashApp to get $5.
- PayPal (PYPL) launched a new service that allows you to buy, sell, and store cryptocurrencies within its digital wallet.
- Apple just announced that they will accept Bitcoin through Apple Pay.
- Venmo joined their competitors and announced that they will allow crypto on their platform.
- Coinbase announced that it will go public.
- Mastercard announced that they will integrate with Bitcoin.
- Tesla put $1.5 Billion in Bitcoin, which drove the price of all crypto’s sky high within minutes of the announcement.
- Ethereum is nearing completion of Ethereum 2.0. Analysts are predicting that that price of Ethereum will double in 2021.
- The city of Miami, Florida just announced that they will be purchasing and accepting Bitcoin as a form of payment where you can possibly pay for local income taxes with your Bitcoin.
- Canada just approved a Bitcoin/crypto ETF (Exchange Traded Fund) that will soon be available with Canadian brokerages. The U.S. is expected to follow soon.
- Popular finance YouTubers are promoting cryptocurrencies and the crypto online content is rapidly growing.
- Decentralized Finance (DeFi) is growing globally and is becoming more widely accepted day by day.
- In the first 30 days of 2021, the price of Ethereum doubled.
Knowing this, would you invest in crypto this year? Comment below. Remember that investing in crypto is very risky. It is a volatile market that could go up or down rapidly with a short tweet from Elon Musk. Only invest what you are willing to lose.
Affiliate Link Notice: This post contains affiliate links, which means I may earn a small commission at no additional cost to you if you decide to purchase or sign up for a product through my referral links. While you can sign up through any other means, it would help support the blog if you sign up through my links. Thanks.
Disclaimer: This post is for entertainment purposes only. I am not an investment professional. This information should not be misconstrued as investment advice. Invest at your own risk!
Pingback: How I make over $2500 per year Mining Bitcoin - Finance Throttle