The crypto world is dominated by two digital currencies, namely Bitcoin and Ethereum. Since the two were launched, it has become increasingly impossible to talk about significant changes in the industry without mentioning them. Unsurprisingly, these two have the largest market capitalization, and this makes them the most sought-after cryptos.
Here we’ll shift your attention to Ethereum and highlight some of its positives and negatives. With this information, you’ll be able to determine whether the digital currency will continue to be an innovative project and whether you should buy Ethereum or not.
A group of cryptocurrency analysts is convinced that the world is yet to witness the best of Ethereum, with many predicting that the crypto will record the highest market capitalization in 2018. Looking at the way the digital currency has been performing in the last few years, we think that it still stands a chance to top the market in 2018 or in the near future. Additionally, its innovative features are a good indication that better days are yet to come.
However, let’s not get too excited and forget the many problems the digital currency faces, such as volatility and competition from other cryptos, especially Bitcoin.
Ethereum: The positive
Ethereum is one of the cryptos with groundbreaking technology innovation. Its revolutionary features make the digital currency better than its competitors in a whole lot of ways. For instance, the digital currency features a Smart Contract functionality that promotes faster and more transparent cryptocurrency transactions.
Additionally, its virtual machine widely known as the Ethereum Virtual Machine helps the developers to complete scripts more effectively and create various decentralized apps within the EVM environment. The platform also offers a transferable token, Ether, that is designed to help programs run better within the network.
The above innovations make the platform stand out and be able to offer better crypto experience. With time, crypto analysts speculate that the digital currency will surpass Bitcoin to become the most powerful platform.
Second most-valued cryptocurrency
Ethereum is currently one of the most-valued digital currencies after Bitcoin. More people continue using the Ethereum blockchain system by the day making it a mainstream cryptocurrency. An increased usage of a blockchain system translates to more miners as well as more users. As more people start using the digital currency, the platform will become more distributed.
At the moment, it is safe to say that the project is performing very well in terms of market capitalization hence its high valuation. Since the platform is strong, it is likely to continue attracting more users. Similarly, more skillful developers will be attracted to the platform, and this will help the network to boost.
Over the years, the project has successfully manifested itself to users that it is free from corruption. No individual, organization or even the government can influence/control the digital currency, whether directly or indirectly. Its system is immune to third-party interference, meaning that unauthorized personnel cannot make any sort of alterations to the available data.
The applications running within the Ethereum blockchain are impossible to shut down and never experience downtime. Additionally, the apps are not tied to one specific category or field. Developers are free to create a decentralized solution for any industry of choice – from healthcare to education and entertainment.
Facilitated mining process
As most digital currencies, Ethereum utilizes the Proof-of-work algorithm to transaction verification that provides for miners to earn Ether with each block solved. Still, this approach to mining is power-consuming and costly. With this in mind, the Ethereum developers have announced an upgrade to the protocol called Casper, which is a first step to the energy-efficient Proof-of-stake consensus.
Ethereum: The negative
Regrettably, things aren’t completely perfect for the Ethereum project. Since it was launched, the Ethereum community has had its fair share of challenges. For instance, during its inception, Ether worth $50 million US dollars was stolen, and this led to a split in the blockchain; but the platform has been struggling with some additional problems as well.
For some time now, this digital currency hasn’t been able to efficiently scale its innovative technology to a wide range of people. This is most likely one of the biggest challenges facing the platform right now.
At the moment, the Ethereum platform can only handle approximately fifteen transactions per second. This doesn’t look good, bearing in mind that the network is very large. The scaling issues become more prevalent when the system is congested. With congestions, user experiences are bound to decline significantly, fees go up, and wait times get longer.
Still, following the recent announcement made by Vitalik Buterin, there is a chance that the platform will soon overcome this limitation and scale to 1 million transactions per second.
Although the smart contract functionality is undoubtedly a technological breakthrough, some experts claim the Ethereum smart contracts are full of security flaws. The recent research has shown that over 3,000 contracts are vulnerable to breaches and can result in huge losses once tampered with.
Top it all, Ethereum is a “home” to multiple ICOs. Due to its friendliness to app development and support of ERC-20 tokens, the ever-increasing number of projects emerge on top of the platform. Unfortunately, not all of them boast of exceptional reliability and can even end up being outright scams. Probably, this was the main reason for the Securities and Exchange Commission to implement aggressive ICO investigations.
Is Ethereum still worth investors’ attention?
Ethereum is still a reputable digital currency. It makes use of innovative technology and has one of the strongest communities. By the look of things, this crypto is likely to remain an innovative project for a while. Nonetheless, the team behind the digital currency needs to overcome numerous problems Ethereum faces now. How Ethereum handles its challenges will significantly determine whether it will continue being an attractive investment option and the key platform leading blockchain innovation.