There are thousands cryptocurrenciescurrencies, but few can compete with the ecosystem or activity of Ethereum (ETH 0.68%). With a market cap of nearly $190 billion, Ethereum is second only to Bitcoin (CRYPTO:BTC) in terms of market value, and it is by far the largest smart contract platform in the world. Here are three main reasons why all investors should consider getting exposure to Ethereum.
Ethereum has a deep ecosystem
Neil Patel: Launched in 2015, Ethereum is the world’s first working blockchain, offering the ability to build smart contracts on the network. Smart contracts are computer programs that run automatically when two unrelated parties meet the terms of a particular transaction. On the same topic: These 3 Promising Cryptos That Traders Are Watching Closely Right Now: Ethereum (ETH), UNUS SED LEO (LEO) and Big Eyes (BIG). The need for intermediaries has been completely eliminated. Think, for example, of guarantees that become free as soon as a loan has been repaid in full. This is all possible through software called the Ethereum Virtual Machine, which runs these smart contracts.
This setup is completely different from bitcoin, which was created for the sole purpose of being a peer-to-peer digital currency system. And unsurprisingly, this is why Ethereum has attracted most of the engineers and IT people working on expanding the platform. According to venture capital firm Electric Capital, more than 4,000 monthly active developers were working on Ethereum by the end of 2021, with 20% of new Web3 developers joining this blockchain. It’s an important part.
As a result, Ethereum now has the largest ecosystem of decentralized applications (dApps) of any other cryptocurrency. According to the nonprofit crypto directory State of the DApps, nearly 3,000 dApps run on Ethereum. They can have different usage scenarios ranging from decentralized financial protocols and gaming to social media and non-functioning token markets. And while the overall market took a beating in 2022, $36.5 million in dApps trading volume has taken place on Ethereum in the past 24 hours (at the time of writing).
The incredibly deep ecosystem that surrounds Ethereum increases the chances of continuing to create real-world utilities and greater user adoption over time. And that is a compelling reason to buy this cryptocurrency and hold it for the long term.
Ethereum is about to get even better
RJ Fulton: Of the plethora of reasons why cryptocurrency investors should make sure they own Ethereum, perhaps the most compelling is an event that kicks off in a few weeks. The date is not concrete, but between September 16 and 20, Ethereum will transition from the slow and energy-intensive proof-of-work consensus mechanism to a faster and more efficient proof-of-stake consensus mechanism known as fusion. Also read: Sandbox, ApeCoin and Persystic Token Open New Opportunities in the Cryptocurrency Market. It is estimated that the blockchain will use 99% less energy once it has fully transitioned to proof of stake.
It may be a bit long-winded, but the merger is arguably one of the most significant events in cryptocurrency history. Given that the merger has been in development for much of the past eight years and an end is finally in sight, it’s a little hard to comprehend that this highly anticipated day is near. .
Once The Merge is fully rolled out, it is hoped that Ethereum will become more conducive to app development. Under the current proof-of-work mechanism, network costs are high and speeds can be slow, hampering the efforts of smart contract developers.
The price of Ethereum has skyrocketed in the past two and a half years, mainly due to the wide popularity of the blockchain, which has become a favorite among developers who use Ethereum smart contracts to create deFi applications. But this growing popularity has made the network overloaded and expensive to use, justifying a necessary change in proof of work. When Ethereum moves to proof-of-stake, the blockchain should be able to support more applications without sacrificing speed or cost, which will hopefully bring even more utility to the network and better returns for investors.
Pending the merger, it appears that Ethereum’s popularity will continue to rise. Since early 2022, Ethereum has added 142,000 validators, an increase of more than 50%. It also seems that more and more users are creating wallets compatible with Ethereum. In just eight months, more than 20 million new wallet addresses were created.
If Ethereum has made more than 1000% returns since 2020 thanks to the clunky proof-of-work consensus mechanism, imagine the long-term value that Ethereum will retain once it fully transitions to the proof mechanism.
Ethereum remains the king of NFTs
Michael Byrne: While blockchains like Solana (CRYPTO:SOL) and Polygon (CRYPTO:MATIC) have gained traction in the world of non-fungible tokens (NFTs), Ethereum remains the 800-pound gorilla in the room when it comes to acts of NFT. Data from CryptoSlam, an NFT data aggregator, shows that Ethereum’s NFT sales volume is smaller than that of all other blockchains. On the same topic: Towards the end of crypto mining? Here’s the how and why!. Ethereum’s NFTs accounted for more than $29 billion in total sales, compared to about $4 billion for the second-ranked Ronin (CRYPTO:RON) (which consists almost entirely of sales of Axie Infinity), $2.5 billion for Solana and nearly $1.1 billion for Flow (CRYPTO:FLOW), which is largely due to NBA Top Shot).
While NFT sales on Ronin or Flow are more or less dominated by a high-profile project, Ethereum boasts a deep and well-diversified NFT market, with 11 different collections generating over $500 million since inception. As the original blockchain that introduced smart contracts to the world and enabled the advent of NFTs, NFTs on Ethereum have a cachet that other blockchains have yet to match, and individual coins from collectibles such as CryptoPunks and Bored Ape Yacht Club have been regularly sold for hundreds of thousands of dollars or more. These two collections have a combined value of nearly $3 billion.
Ethereum NFTs have created a huge ecosystem of their own. NFT marketplace OpenSea, originally exclusive to Ethereum NFTs, was valued at $13 billion in its latest funding round. Previously exclusive to Solana NFTs, Magic Eden reached unicorn status with a valuation of $1.6 billion in the latest seed round and recently added Ethereum NFTs to its platform. If you are optimistic about the growth of NFTs, Ethereum is an unmissable asset.
With a rich ecosystem, a major upgrade in the form of the merger, and a dominant position in NFTs, Ethereum is worth considering by all investors.
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