Historically, the stock market has been the main source of wealth. Over the long term, stock investments brought an average annual return of 7% when dividends were reinvested. By comparison, bond prices, gold, oil, and even inflation-adjusted housing prices have lagged behind. Why should I invest in Ethereum?
The Year of Cryptocurrency
Cryptocurrencies like Bitcoin and Ethereum (ETH/USD) turned things upside down in 2017. The combined market capitalization of more than 1,200 cryptocurrencies rose from $17.7 billion at the beginning of the year to $236 billion, an increase of nearly 1,000% in ten and a half months.
The market leaders were bitcoin, which capitalization reached $133 billion, and Ether, which rose in price by 3,700% since the beginning of the year. Bitcoin’s popularity is due to its capitalization, as well as the fact that it was the first cryptocurrency on the market and that a number of major retailers accept it for payment, while the sharp rise in the popularity of Ethereum in 2017 is due to the potential of the Ethereum blockchain. The Enterprise Ethereum Alliance now includes more than 150 organizations, including nine well-known companies that are testing various Ethereum blockchain projects in the financial, industrial and energy industries.
Ethereum differs significantly from other blockchain options because of its use of smart contracts. These protocols help negotiate and verify contracts and enforce their terms. In other words, they help companies safely and efficiently make deliveries and comply with legal requirements. Given how many companies are testing Ethereum blockchain right now, it is quite possible that it will become the accepted standard in the financial services industry.
Big profits come with big risks
According to CNBC, a critical vulnerability in Parity’s cryptocurrency wallet resulted in the freezing of the equivalent of about $280 million in ethers. According to a Nov. 7 report from Parity itself, the vulnerability allowed users to modify code and gain control of other people’s cryptocurrencies. Worse, one user destroyed the wallet and deleted the code, which caused such a large amount of money to be frozen. Because of this, other users cannot withdraw their cryptocurrency from the wallet, and it is unclear when this problem will be solved. Nevertheless, Ethereum is still considered one of the best cryptocurrencies in which it makes sense to invest money.