Ethereum What Do You Need to Know?
If you are new to the digital currency market, cryptocurrency exchange tickers like ETH, BTC, and ADA, can quickly start to form a cognitive soup of confusion. However, when investing in any digital currency, it is imperative to research and fully understand, exactly what it is you are investing in.
Ethereum – A Basic Overview & How it differs from Other Coins like Bitcoin
With Ethereum in particular, one of the critical things that potential investors need to keep in mind is that ETH is not a true cryptocurrency.
When looking at a regular blockchain, all data entries represent permanent, fixed pieces of information which can never be modified. Coins like Bitcoin, all data entries subsequently represent individual BTC coins. Moreover, all the BTC blockchain itself does, tracks where each Bitcoin is on the blockchain at any given moment.
Given the above, Ethereum is very different to Bitcoin in that the Ethereum blockchain also includes features called ‘Smart Contracts.’ This means that whereas a transaction on the Bitcoin blockchain can only track, a transaction on the ETH blockchain can also trigger a computer program to run.
Why It is Better to Think of Ethereum As a Giant Computer
Ethereum is exciting from a blockchain perspective, as ETH essentially works like a giant decentralized computer. There is no limit to what kind of applications can run as a result of the Ethereum Smart Contract system. Much more importantly, this is why ETH is used to directly build and launch services, as new start-ups use ETH to raise funds via Initial Coin Offerings (ICOs).
Why is Ethereum Listed on Cryptocurrency Exchange Platforms if it is Not a Digital Currency?
To say that Ethereum isn’t a true cryptocurrency isn’t correct. ETH digital currency tokens can be transacted just like Bitcoin and Litecoin. In the case of the ETH blockchain, however, ETH coins are ideally intended to be used as ‘GAS’ (payment to cover the cost of executing a Smart Contract), as well as used as a base currency which people can invest in to directly fund ETH based ICOs.
Of course, ETH coins are just as popular among people who do not plan to build or launch applications on Ethereum. This is because every ETH token has a value which increases in tandem with the number of projects which funded and which do launch successfully on Ethereum.
Ethereum Price Predictions for 2018
Given how popular ETH has become as a digital currency and decentralized computer. ETH, in theory, should continue to rise in value over the course of 2018. What potential investors should keep in mind, however, is that ETH itself is starting to suffer from scalability issues. Specifically, ones who are seeing some start-ups leave ETH due to significant transaction bottle-necking.
Naturally, ETH is currently investigating ways to process more transactions faster. However, there are some ETH-like blockchains such as Cardano which is arriving on the cryptocurrency scene.
Many say that they have already found ways to mitigate ETH’s scalability issues. This being the case, investors who do choose to invest in ETH in 2018, should also consider investing in other ETH-like projects at the same time.