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What Is Ethereum?

Cristina MaciasBy Cristina MaciasDecember 23, 2021No Comments3 Mins Read
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What Is Ethereum?
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Ethereum or ETH is a digital asset that exists exclusively online. The coin is among the most popular cryptocurrencies and is second after Bitcoin in terms of the total size. The digital asset has created a lot of controversies, from those who are sure that it is going to be the leading cryptocurrency to those who are sure that it is nothing but a speculative bubble. So, before you convert 55.5 ETH to USD or any other amount, you should learn how this coin works.

What We Know About ETH

Ethereum is nothing but a cryptocurrency that has sprung over the past few years. Being the brainchild of 8 co-founders, the digital asset made its debut in 2015. The coin operates on a decentralized computer network called blockchain that tracks and manages the currency.

This network allows its users to exchange money without a central intermediary, like a bank. Therefore, the currency is autonomous, while transactions remain anonymous.

What Does ETH Do?

ETH is able to power a few applications offering several functions:

  • Currency. With the help of a crypto wallet, you will be able to send and receive ETH or pay for services and goods if the digital asset is accepted as payment.
  • Smart contracts. They are a kind of permission-less application that automatically operates when the conditions are met.
  • Digital apps. The platform powers digital applications that let users play games, send money, invest, follow social media, track an investment portfolio, etc.
  • Non-fungible tokens. They are powered by ETH and make it possible for artists or others to sell art or other things directly to buyers with the help of smart contracts.
  • Decentralized finance. The digital asset allows people to avoid centralized control over their funds` movement.

Is ETH Worth Investing?

The digital asset has significantly risen over the past few years, which means that those who purchased it years ago have earned well. However, it is still crucial to understand what you are going to invest in. The thing is that those who purchase ETH are buying a coin that is not backed by any cash flow or hard assets.

It might sound trivial, but it is the main difference between cryptocurrency and stocks. The latter is a fractional ownership in a business, and its performance is tightly connected with the success of that business. If it manages to grow, then the stock should grow.

Just like the bigger part of other cryptocurrencies, ETH is not backed by anything. That is why it is risky. However, many people have already managed to earn a lot by investing in ETH. Thus, you should give it a try.

Final Words

Many people have already bought digital coins and are using them for different purposes. These days, it is possible to figure out what an exchange is about thanks to articles, such as the Changelly review. So, you can always learn everything you need about a digital asset or an online service.

Whether you are trading ETH or any other cryptocurrency, you should clearly understand that there are risks, such as the potential loss of the investment. Investors are recommended to take a measured approach with coins due to their volatility and different risks. Thus, ETH is a good investment option, but you should never invest more than you can afford to lose.

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Cristina Macias
Cristina Macias

Cristina Macias is a 25-year-old writer who enjoys reading, writing, Rubix cube, and listening to the radio. She is inspiring and smart, but can also be a bit lazy.

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