If you’ve been studying cryptocurrency, you’ve come across Ethereum. Many traders believe the well-known and respected cryptocurrency will outlive Bitcoin.
Ethereum is behind Bitcoin in terms of its value and liquidity. It was created for a much “greater” purpose, unlike Bitcoin, and the idea is even utopian. There are many interesting facts about the facts, and some of them you should know if you want to start trading on Ethereum. Here we go!
The idea behind it
Vitalik Buterin is a person behind the creation of Ethereum. Etherum started out as a project that focused on dapps (decentralized apps). While Bitcoin worked hard on blockchain technology, Buterin wanted to take it further, a space where everyone can develop their own apps based on blockchain technology. This is how the Ethereum project started and Ether (the cryptocurrency) was created. Bitcoin and its technology could be a huge inspiration, but what Ethereum has brought is a micro-economy that has spread around the world.
Is Ethereum profitable?
Along with Bitcoin, Ethereum is the most popular currency, but the difference is significant. You can’t have the same strategy for trading Bitcoin and Ethereum. It is vital to know what you need to gain an advantage when trading. You should always pay attention to liquidity and volatility, which is very high for both Bitcoin and Ethereum. As mentioned above, Ethereum works differently to Bitcoin which means they are decentralized software. This means that smart contracts exist thanks to this and many people enthusiastically invest in Ethereum every day.
What does Ethereum guarantee?
Ethereum is famous for its fundraising. The money stays in their fund until the fundraiser ends, and what Ethereum guarantees you is that if you are a user who needs finance and there is someone who wants to help you develop a project, they will not lose what they invested. This means that if the projects fail, the money goes back to those who were investors.
What are the other benefits?
The simple answer is yes. As with bitcoin, you can pay for certain things. However, traders will instead wait for their price to rise or fall due to volatility and profit possibilities. Furthermore, Ethereum mining (making) requires much less than bitcoin, which means it can mine more coins. For example, you can mine an Ether in 15 seconds, while mining a Bitcoin can take up to ten minutes. While you need heavy equipment for Bitcoin mining, Ethereum mining is possible on regular computers, meaning it costs a lot less. Keep in mind that the supply of Bitcoin is limited and, although the limitation of Ethereum also exists, it shrinks to 18,000 per year.
Liquidity and volatility
When it comes to liquidity, Bitcoin leads by 17 billion more daily turnover than Ethereum. However, both cryptocurrencies have high liquidity, so it’s far from wrong if you choose to trade Ethereum rather than Bitcoin. In terms of volatility, whatever happens, Bitcoins seem to recover faster than Ethereum. However, ethereum appears to remain on track, keeping volatility high despite all obstacles, with volatility of 13%. Keep in mind that, while Bitcoin has managed to recover a couple of times this year faster than Ether, during the fourth time Ethereum has doubled the percentage growth compared to Bitcoin.
In conclusion
Investing in Ethereum is a good choice as both Bitcoin and Ethereum are highly respected currencies and continue to attract investors and traders. If you choose Ethereum, you are not selecting the “worst” option. It all depends on your personal preferences. It is also useful that Ethereum does not have a limit of 21 million and can be produced much faster. It is worth mentioning that the Ethereum project was created to offer multiple opportunities to people around the world, all decentralized. This is to name a couple of reasons why people like investing in Ethereum so much.
Disclaimer: The information contained herein is provided without consideration of personal circumstances, therefore it should not be construed as financial advice, investment recommendation or offer or solicitation for any cryptocurrency transaction.
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