Ethereum Investment Overall Score: A-
Ethereum Growth Potential: A-
Ethereum Sustainability Score: A
Ethereum Brains Behind Currency: A+
We enjoyed putting together this review. Ethereum is a crowd favorite among crypto investors, and why not? It is one of the top coins by market capitalization over the last year ranking only behind Bitcoin. It has grown in popularity due to advantages over other crypto coin which include functionality and transactions. It isn’t the size of bitcoin, but as of today, it’s the only coin within spitting distance of the space pioneering powerhouse. Ethereum has a crypto market capitalization of $105bn while Bitcoin takes top spot at $191bn.
Let’s start with some cool naming convention knowledge. The founder of Ethereum was a big science fiction fan, and as history has it, he was browsing Wikipedia articles when he stumbled upon a suitable name for his idea. He is quoted as saying the Ethereum is named after the word ether. Ether is defined as “the hypothetical invisible medium that permeates the universe and allows light to travel” by Ethereum’s head man.
As you look deeper at the currency, you’ll find that the history of Ethereum is rooted within Bitcoin. Vitalik Buterlin pioneered the currency out of inherent need in the space as many ICO’s do. His history was with Bitcoin Magazine as a developer, so he was closely following the pioneer in the space in his every day life. When he realized that Bitcoin didn’t have any technical functionality, the idea for Ethereum was born.
Our boy Vitalik realized that there was a world outside of bitcoin that could use open source functionality. One of the main values of Ethereum is that it is open sourced. Really this is just a fancy way of saying open to the public. Ethereum’s source code is available for free and available to the public so can you can leverage one of its main value adds: smart contracts.
Smart contracts are essentially rules and frameworks that serve as the escrow service during a transaction. If you are waiting for a certain action to take place, the contract pauses until it sees all engineered open script rules have been fulfilled. At that point Ethereum is transferred.
Ethereum also issues a side cryptocurrency named Ether. Ether is transferred between accounts and has a main functionality of rewarding contractual actions.
One of my favorite areas of weird investing that could be greatly enhanced by a cryptocurrency like Ethereum is off market trading. This space represents and opportunity as well as early stage angel investing. With no Robinhood to speak of for delisted and new stocks in need of funding, penny stocks could be programmed open source to be sent and received. Once shares are issued and received, Ethereum would realize the completion on a contract and issue payment.
The currency has become so popular that it has seen early technology partners such as Microsoft, Samsun, Intel, ConsenSys, and Toyota with its “Enterprise Ethereum Alliance.” I think Marvel is likely making a movie about the group later this year. They’re lining up next to Iron Man and the Hulk. I’m dressing up as Spiderman…
The coin has no shortage of major financial and institutional fans. JP Morgan, Bank of NY Melon (A massive company I used to cold call worth billions), Banco Santander de MX, National Bank of Canada, Deloitte, Merck, and holy moly the list goes on and on in the EEA (aka the alliance). They’re the Samuel Jackson’s of this Avengers style crappy Ethereum movie I’m making in my head. They bring the cash and the direction!
The other thing to note about Ethereum is that Ethereum is technically just the presenting layer of Vitalik’s currency. It is the clean layer on top which records legers of transactions. Ether is the real cryptocurrency who’s blockchain is generated by Ethereum. They’re interchangeable and it’s just technical jargon that won’t do you any good at this point, so just think of Ethereum and Ether as one in the same.
How it Differs from Bitcoin
Alright, so how is Ethereum, aka Ether, different from Bitcoin.
Ethereum Transaction are Faster
Time to blockchain is typically 14 to 15 seconds, which means that most transactions happen in less than a minute. Bitcoin, by comparison, often takes 10 minutes.
Many users of alternate exchanges run to Ethereum before Bitcoin when cryptocurrency markets stall. This has made Ethereum a bit of a haven currency within crypto circles. Applications like Binance do not transfer to USD and thus funds need to be transferred into Ethereum, Bitcoin, Bitcoin Cash, or Litecoin so that the currency can be transferred into Coinbase to get you into fiat currency. We have more on that coming in a future post.
Transaction Size and Fee’s Associated
One of the cool features about Ethereum is that it’s fees differ by how complex the contracts associated with it are. It also takes into account bandwidth use and storage needs. If you’ve ever heard of the GAS system that Ether uses to calculate and make the wheel roll, this is one of it’s main functions. It calculates fees algorithmically. Bitcoin by comparison only looks at bytes associated with the size of the transactions and fees you off that by scale.
All of this results in transaction costs being noted as significantly lower for Ethereum than BTC.
Ethereum addresses are composed of the prefix “0x” which denotes that the coin address is Ethereum. It is then followed by a 40 digit code which associates with someone’s public address. The process of transferring Ethereum is no different than transferring Bitcoin. You simply log into your wallet and/or exchange, access your funds, and send them the way of the address.
There are no shortage of Ethereum doubters, much as there is no shortage Bitcoin shorters. Mike Novogratz, a popular icon on American television such as CNBC, has said that Cryptocurrency is in a bubble and includes Ethereum. Many others agree. It’s worth taking note of before you jump in, but it seems there are many more supporters than doubters.
Where to buy Ethereum?
I like Coinmama for buying Ethereum. We go over a list of top exchanges here, but if you’re a US based investor, it’s safest to use Coinmama for you Ethereum deposits.
Coinmama takes credit, debit, bank deposits, and wire transfers. They’re also known for having tremendous customer service. I highly recommend them as many of our friends feel stuck at Coinbase when they have an issue. We’ve been reassured that Coinbase is working on this. Until they get up to snub though, Coinmama is A+ and our #1 place to invest in cryptocurrency like Ethereum.
We wish you the best of luck out there!