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Ethereum (ETH) | Cryptocurrency You Must Have in Your Portfolio Now [2020 and Beyond]

Pioneer of blockchain based smart contracts and more than just another simple cryptocurrency.
Ethereum is an open source, smart contract software platform built on blockchain technology that enables developers to build and deploy decentralized applications (dApps). Anyone can write code that controls digital value, runs exactly as programmed, and is accessible anywhere in the world on top of the Ethereum blockchain.
When running on the blockchain a smart contract becomes like a self-operating computer program that automatically executes when specific conditions are met. On the blockchain, smart contracts allow for code to be run exactly as programmed without any possibility of downtime, censorship, fraud or third-party interference. It can facilitate the exchange of money, content, property, shares, or anything of value.

About Ethereum -What is Ethereum and Ether (ETH)?

Ethereum was conceptualized by Vitalik Buterin in 2013 and the network went live on July 30th, 2015 with 72 million Ethereum premined.
When we hear the word “Ethereum” we typically associate it with a cryptocurrency – like Bitcoin. That is actually not the whole truth. "Ethereum" is the platform built on blockchain technology that enables developers to build and deploy decentralized applications using smart contracts; while "ETH" or "Ether" refers to the native cryptocurrency used to power the Ethereum network and all the applications built on the Ethereum blockchain. The ETH is sold on many exchanges, like Binance, KuCoin, Coinbase etc. and it also works as the transaction fees paid to miners on the Ethereum network.

The Difference Between Ethereum and ETH

  • Ethereum is the platform and Ether is the fuel that powers the platform
  • Ether is bought & sold – not Ethereum.
  • Ethererum has various applications.
  • Ether has only one application -enable operations on the Ethereum blockchain.
Ethereum’s vision is to create a “World Computer” – a huge network of many private computers that run various internet applications without any third parties; completely revolutionizing and reinventing how the internet functions. Creating and building the foundation for a new era of the internet:
  • An internet where money and payments are built in.
  • An internet where users can own their data, and your apps don’t spy and steal from you.
  • An internet where everyone has access to an open financial system.
  • An internet built on neutral, open-access infrastructure, controlled by no company or person.
It’s hard to say everything Ethereum will be used for because it can be used for anything you can write a computer program to do. The results will look like regular websites or mobile apps, but will be completely uncheatable. As long as it’s built right, not even the person who makes the app will have the power to break the rules they agreed to.
Watch Buterin on Ethereum and Decentralization. I promise you'll love this guy's brilliance and feel his passion and inspiration.

More importantly for lovers of decentralization. There is no company or centralized organization that controls Ethereum. Ethereum is maintained and improved over time by a diverse global community of contributors who work on everything from the core protocol to consumer applications. 

Ethereum Fast Facts

  • Circulating Supply       109,285,981 ETH
  • Total Supply               109,285,981 ETH
  • All Time High               $1,432.88 USD     (Jan 13, 2018)
  • All Time Low                $0.420897 USD    (Oct 21, 2015)

Ethereum in 2020 and Beyond: Is ETH a Good Investment?

Ethereum (ETH) only rose by a meager 2% (from $140.82 USD to $143.89) between January 1st, 2019 and January 1st, 2020. In a market and year where most coins and tokens posted double digits losses it's fair to say that the coin didn't do too badly this past year; especially given the fact that 2019 was a huge year for Ethereum in terms of development achievements and the growing popularity of its market-reigning decentralized applications (dApps.)
So will the ETH price perform better than the immediate past year? There are strong reasons to believe so:
  • Explosion and growth of decentralized autonomous organizations (or DAOs) and decentralized finance, or DeFi, which are being built on top of the Ethereum blockchain. This will increase demand for the Ether which is used to power all of these applications.
  • The coming deflationary trends coming to ether, namely via the “fee burning” Ethereum Improvement Proposal (EIP) 1559.\
  • The imminent launch of Ethereum 2.0 promises to bring some major changes and drastic improvement to the Ethereum network. By introducing a proof-of-stake chain to run in parallel to Ethereum’s proof-of-work chain and partitioning the database into “shards”, Ethereum 2.0 transactions will run significantly faster and also help overcome the current scaling issues.
The biggest hope for the future of ETH lies with the Ethereum 2.0 upgrade. If the upgrade delivers on all its promises; The current operational and scalability issues facing the Ethereum network would be fully addressed. Transaction fees will be significantly more competitive along with seeing increased transaction speed.

Ethereum 2.0 -Ethereum's Scaling Solution.

So what is in Ethereum 2.0 and how or why is it Ethereum's messiah that will take us to the promise land (moon)?
  • Proof-of-Stake
  • Sharding
  • Plasma


Proof of Stake
Every blockchain platform has its own “consensus mechanism”, which determines how transactions are verified on the network and new coins produced or mined. Ethereum uses the same model as Bitcoin, which is called “proof-of-work”. 
The proof-of-work mechanism creates really complex puzzles that no human can solve, so they require powerful computers instead. Providing that you have the right equipment, you can connect your device to the blockchain to help solve the puzzle. If you are successful, you earn the cryptocurrency as a reward. This is known as mining.  
However, Proof-of-work requires a very large amount of electricity. Furthermore, because the puzzle becomes more and more difficult as more users start to mine the cryptocurrency, you need really expensive hardware to have a chance of winning the reward. 
This is why Ethereum wants to switch its consensus mechanism over to a proof-of-stake. The model works in a different way to proof-of-work as it makes it fairer for other people to get involved in the mining process, and it also requires far less electricity.  
Using Proof-of-Stake, your chances of winning the mining reward are based on the amount you have “staked”, which means the number of coins you have invested in the system. The theory is that the more coins you have, the more motivation you will have to ensure the blockchain remains safe and secure. 


Sharding (Ethereum 2.0)
Sharding is a protocol that the developers are working on to change the way that transactions are verified. Under the current model, every single “node” that is supporting the blockchain needs to confirm every transaction that has been submitted. 
Note: A node is used to describe a device that has been connected to the blockchain to help verify transactions. The more nodes there are, the more secure the network is. As at today January 15, 2020, Ethereum has more than 25,000 individual nodes! 
For example, let’s imagine that 100 transactions have been sent within the Ethereum system. Which means that they must all be verified by the blockchain before they are confirmed as valid. This would mean that all 25,000 nodes would need to verify all 100 transactions individually -this highly inefficient; and that' where Sharding comes in.
Sharding puts nodes into groups. Each group of nodes is called a “shard”, with different groups working on different parts of a transaction. Ultimately, it creates a more efficient way to confirm transactions and allow the network to significantly increase the amount of transactions it can process every second.
Sharding is definitely the most complex Ethereum scaling solution. It’s also the one that is expected to be released last, giving developers the necessary time to both fully scope it out and test it in production environments.


Ethereum Plasma
The plasma protocol is concerned with unnecessary data and wants to remove it from the main blockchain to free up space. For example, when somebody creates a new smart contract, it is automatically posted to the main Ethereum blockchain. Even though the smart contract might not be completed for a long time (or possibly never at all) it is still sent to the blockchain. 
This has caused a lot of problems because nodes still need to verify the transactions, meaning that it slows down the network. The plasma solution is planning on creating an additional layer on top of the main blockchain, which will be used for incomplete smart contracts. 
Once the smart contract is in operation, it can then be sent to the main blockchain. Vitalik Buterin has stated that he is looking to install both plasma and sharding, which means that if successful, the Ethereum blockchain could soon be processing thousands, potentially millions of transactions per second! 

Summary and Conclusion

Ethereum is the first and original smart contract blockchain project, which is why it has been the second most popular cryptocurrency after Bitcoin, for so long.
It's popularity is not just based on its first-mover advantage; -people trust the platform because it's been extremely reliable over the years, plus they know that the team is highly talented. Listening to Buterin in the above video, you will fall in love with his brilliance and want to do business with him.
More so, The Ethereum community is the largest and most active blockchain community in the world. It includes core protocol developers, cryptoeconomic researchers, cypherpunks, mining organizations, ETH holders, app developers, ordinary users, anarchists, fortune 500 companies and many more.
Right now, thousands of developers all over the world are building applications on Ethereum, and inventing new kinds of applications, many of which you are already using today such as:
  • Cryptocurrency wallets - that let you make cheap, instant payments with ETH or other assets
  • Financial applications - that let you borrow, lend, or invest your digital assets
  • Decentralized markets - that let you trade digital assets, or even trade “predictions” about events in the real world
  • Games - where you own in-game assets, and can even make real money
Many innovative dApps are being built on the network daily and as long as these projects are running and keep increasing; there will only be more demand for the Ether (ETH) which powers them and thus it is expected that the price of ETH can only go up.
With Ethereum 2.0 underway and given its potentials to radically improve the Ethereum network capabilities and bring permanent solution to the much talked about scalability issues of the Ethereum blockchain, the future really does look very bright for the number smart contracts development platform.
Putting all these facts and many more together, it is in my opinion that Ethereum will always be the number one smart contract platform, and a potentially “best-performing asset of the ongoing decade (the 2020s)" even as competition is highly welcome.

  1. https://ethereum.org/learn/
  2. https://www.bitdegree.org/tutorials/ethereum-price-prediction-2020/

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