Is Ethereum A Safe Investment?

Ethereum may be reaching for the moon again. You don’t want to miss out, but you’re still wondering: is Ethereum safe, and is Ethereum good investment? 

After all, there have been many issues brought up over the years: security, volatility scalability, and new cryptocurrencies willing to be “Ethereum killers.” 

With all those in mind -- is it safe to buy Ethereum?

 

Security of Ethereum - History and Present

The largest security threat to Ethereum occurred in May 2016. It was called the DAO hack. Millions of dollars of ETH were stolen from the DAO

-- the Decentralized Autonomous Organization. 

The repair involved a hard fork

of the Ethereum blockchain -- which split the blockchain into Ethereum and Ethereum Classic. 

Note, however, that this DAO hack did not corrupt or impact the Ethereum blockchain

itself. This impact is solely focused on the DAO smart contract running on it. 

These days, Ethereum is safe - probably one of the safest cryptocurrencies.

 

Volatility of Ethereum

As with the cryptocurrency market as a whole, Ethereum is quite volatile. Volatility is due to basic economic factors: high variations of supply and demand. 

Ethereum was the first platform to offer smart contracts

. It gave rise to the entire ICO movement. Naturally, these ICOs accepted the majority of their funding in ETH, which created a high demand for ETH -- and the price rose.

When these ICOs began cashing out of their ETH to pay for their business expenses, a large supply was created. As a result, the price fell.

As the market cap

of Ethereum rises over time, its volatility should decrease. Keep in mind that all cryptocurrencies are volatile by nature.

 

Scalability of Ethereum

Ethereum’s goal is to become a world computer. Unfortunately, they are having trouble reaching their goal. 

Indeed, Ethereum has faced scalability challenges, and their network was crippled during the 2017 boom -- when so many people wanted to use it. 

Nevertheless, they’re working on solutions. Vitalik Buterin, the founder and CEO of Ethereum, announced they will release Ethereum 2.0. 

We don’t know for sure if Ethereum 2.0 will work -- but if it does, well, Vitalik Buterin, recently announced that the future launch of Ethereum 2.0 will be “1,000x more scalable” and “cut energy costs by 99%”.

 

Ethereum’s Competition

Speculation is about making sure your investment has a competitive advantage over similar investments. Does Ethereum have and maintain its competitive advantage?

Since Ethereum’s debut in 2015, many “Ethereum killers” have popped up. Cardano, Cosmos ... One of the biggest contenders is EOS.

According to Hackernoon, “EOS developers expect that the platform will at least handle 1000 transactions per second upon launch. In contrast, Ethereum can currently handle around 15 transactions per second.”

If these competitors deliver on their promises, Ethereum might be in trouble. But so far, they haven’t. Plus, Ethereum will launch Ethereum 2.0 to stay ahead of the game.

 

So, is Ethereum a Safe Investment?

EOS and other competitors may be better than ETH. Or they may not be. The future will tell us.

But since lots of bright, talented minds are learning and developing on it, Ethereum is a safe investment -- when compared with other cryptocurrencies -- and remains one of the best cryptocurrencies to buy in the future.