If you are someone looking to jump into the cryptocurrency but you are not sure about the potential returns, this blog post here from VMX Labs will dive into the Cryptocurrency of Ethereum and discuss what Ethereum is, the potential of holding Ether (It’s currency) and the potential of Ethereum as a whole.
Cryptocurrency is a relatively new form of technology. We had a blog post that gives a quick introduction to what Cryptocurrencies are, feel free to take a look at it HERE. To rehash what was said in our earlier blog post, cryptocurrency is simply digital currency, much like the Euro and the USD except it is kept online.
We also have a blog post that gives a brief introduction to what Ethereum is, you can check it out HERE.
As someone who is interested in investing in a cryptocurrency, the first question that comes to mind is…”Is it worth it?” followed by “Will I make money from this?”
These are perfectly valid questions to keep in mind but before we answer these questions, let’s jump into what Ethereum is and its currency, Ethers.
Ethereum has been in the making now for almost 2 years, fund raising was done in 2014 and tens of millions were raised which was a very successful crowdfunding exercise.
Ethereum official launched in late July 2015, and since has become liquid with active trading going on. We have sites such as Kraken, Poloniex, and Gatecoin that trade
significant amounts of Ether each day.
significant amounts of Ether each day.
It is meant to be a cryptocurrency that is backed by computer power, anyone who holds Ether essential own computing power. The idea of a World Computer is what Ethereum is trying to sell. It is a computer that anyone in the world can use. Essentially it is blockchain-based platform where any program can be run that has been uploaded into the network.
It’s goal is to allow people around the world to have cheaper and efficient access to computing power that essentially will have no down-time, no-fuss about storage, and is decentralized due to its blockchain-based platform which means it is very secure.
The answer to this question seems to be very obvious. Every year there are greater technical advances and this leads to a need in greater computing power to put these new forms of technology to use.
Most people today are already heavily reliant on computers and what they can do for us day-in and day-out. Imagine the future…
In the past, people who have had access to great computing power would have had to invest a lot of money into buying and designing these machines to perform the work required of them. Typically, these would have been big corporations; with Ethereum, this allows for the rest of the world to have access to this power too.
With Bitcoin being the first cryptocurrency and a very successful one too, it is nature to try to draw comparisons between Ethereum and Bitcoin. Most people today will have heard of Bitcoin and have some sort of idea that it is a digital currency.
To put it simply, Bitcoin and Ethereum are very different from each other. The only similarity it has is that both use Blockchain technology to reach consensus of all transactions made in its network.
Here is a great article that explains what Blockchain technology is:
So What is Bitcoin?
Bitcoin’s creation had the sole purpose of being a currency, like the ones we know today such as the Euro, the USD, or the RMB. It is not backed by anything, it is simply traded between parties with the trust that it is worth what it is worth, much like many other typical currencies today.
How is Ethereum(Ether) different?
"Ethereum is a modular, stateful, Turing-complete contract scripting system married to a blockchain and developed with a philosophy of simplicity, universal accessibility and generalization."
What is Turing-complete?
Turing-complete normally refers to a device that can solve any problem given an appropriate algorithm and the necessary time and memory.
Ethereum and its Ether is backed by computing power, unlike Bitcoin which can only be traded as a currency, Ether can be used to run computational work.
What is the potential of Ethereum?
The potential of ethereum is immense, the range of possibilities can change how the internet works. Ethereum themselves state that it is “how the Internet was supposed to work”, allowing applications to “run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference.”
Of course, nothing in this world will be 100% certain in succeeding, but Ethereum stands a pretty good fighting chance based on the logical direction of technological growth. People who invested in Bitcoin and held them until the prices took a giant leap got a great Return on Investment (ROI); Ethereum has the potential to succeed Bitcoin as the next big thing on the block.
So is it worth it?
We here at VMXLabs believe that it is. We buy into the idea and the things that can be done on the Ethereum platform. As the general public becomes more aware of this technology and more applications get developed around the Ethereum network, the intrinsic value of Ether can rise.
Ultimately everyone has to decide for themselves we encourage everyone to do a little bit of research on the topic, here are some useful links that can help you along the way as you look into Ethereum.
Technically Advanced Content:
Article Written By: Michael Chow (Co-Founder of VMXLabs)