Investing in a new technology
There are a thousands of cryptocurrencies and ICOs, a loft of them will prove to be a scam or they will simply fail to deliver that they promise. There are also a lot of cryptocurrencies that offer nothing new. I read a lot of white papers and could never figure it out why we have a new cryptocurrency, and why people are buying it.
People buy even cryptocurrencies that have been pre-mined 80%. This is reminiscent of Dot-com bubble, when every company that had the word Internet on their busies plan could raise millions. Of course most of them failed, but just a handfull of those like Amazon, Google etc succeed. Now they have multi billion dollar cap, even larger than a lot of countries. But one think is for sure, picking up the company that will succeed is not easy.
Why Ethereum?
I've been buying Ethereum since last year and I was lucky to build my position around $8 per coin. Blockchain is the best invention of this century. If I had to bet which blockchain will succeed, I would choose Ethereum. Not because ethereum is providing a lot of value right now, its because of the potential it has. This is a lifetime opportunity, its like having the chance to invest on Internet in '90s and not picking up a single company. People knew internet is a great invention, but they could not invest on internet but only on different start-up companies, like ICOs now.
How much potential ethereum has
Ethereum as a network has 24 billion market cap, this is a market cap only on the network. Currently Ethereum does not have real usage. There is not a single company that offer their services on ethereum network that ordinary people use the network. This is just the beginning and it will take some time. With every new company that will work on ethereum, the network itself will gain more value. This is why I don't invest on ICOs but on the network itself.
What are the future developments that will bring value to Ethereum
There are a lot of developments that are expected to happen within a year. One year is my short term holding, there is no way I will sell before that. I think when Ethereum finishes all steps, it has the capacity to even surpass Bitcoin market cap. Ethereum is not just a cryptocurrency, its web 2.0.
New developments that can boost Ether price are:
- Metropolis - new Ethereum upgrade that will bring a lot of improvements. Expected to come out soon.
- Reduce of mining rewards - expected with Metropolis, reducing Ether supply.
- Serenity - upgrade after Metropolis, bringing more improvements and opening the door for proof-of-stake.
- Ice age - will be the next epoch when mining become exponentially harder, thus reducing inflation down to zero.
- Casper - switch from proof-of-work to proof-of-stake. This will recuse the cost to maintain ether network security down to almost nothing.
- ETF - Ethereum has a high chance to be approved for ETF trading. This will open door for big corporations and pension funds to invest.
- Stock market crash - cryptos did not exist during last crash. When next crash will happen, billions of dollars will seek for assets that store value. Last time it was Gold now we have cryptos too.
- Enterprise Ethereum Alliance - a lot of fortune 500 companies saw the potential on Ethereum network. Either we like them or we hate them is a different subject, but they have the capital to develop network and bring it to masses.
- ICOs - while there will be a lot of failing ICOs, the one that will succeed will bring a great value.
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Disclaimer: The information contained herein is not guaranteed, does not purport to be comprehensive and is strictly for information purposes only. It should not be regarded as investment/trading advice.