If you are someone who knows about cryptocurrencies then you would have heard about Ethereum as much as Bitcoin. Since its launch in 2015, it has gained substantial popularity among investors. Despite all the hype around it, if you still find yourself wondering if it is a good bet to invest in Ethereum in 2022, then below are some pros and cons we have put together that can drive you towards making a clear decision.
Let’s begin with a brief overview of Ethereum.
What is Ethereum?
For the ones who are novices, let us clarify that Ethereum is not a cryptocurrency, instead, it is a global, decentralized computing platform that runs on open-source code. This means that it is not operated or owned by a specific individual and several databases, financial tools, and gaming apps are built and run on the Ethereum blockchain. The native cryptocurrency built on this network is called the ‘Ether’ or ‘ETH’.
Let’s dive straight into the pros and cons.
Pros of investing in ETH
Here are some top reasons why as an early investor in cryptocurrencies you should turn to investing in ETH.
- It’s a popular cryptocurrency and has an expanding community:
Even though Ethereum is not the first cryptocurrency, we can safely say that it has revolutionized the way people invest in cryptocurrencies rather quickly. The co-founder Vitalik Buterin has a considerable number of admirers and people have gained trust in Etherium thanks to its transparent vision and aggressive development roadmap. Not to forget that the developer ecosystem of Ethereum is also expanding leaps and bounds since its launch. This further strengthens the fact that ETH is highly secure, because the equal distribution of active developers worldwide, makes it hard for malicious users to hack the blockchain.
- Ethereum is much more than just cryptocurrency:
Another reason for the investors to turn to Ethereum is its ability to connect businesses and individuals around the world with the power of technology. The platform can run apps that have been built using blockchain and even supports smart contracts. If you are wondering what’s the advantage of this, then let us tell you that this makes Ethereum to be used in different sectors like gaming, medicine, finance, energy distribution etc. Moreover, the smart contract ability allows foreign investors to easily convert traditional contracts into digital parallels to secure ownership of various assets like artwork, homes, and luxury cars to name a few. ETH to INR conversion can be done with a tap of a button on reliable crypto exchange platforms like Coinswitch and can be used to make payments as well.
- Etherium is decentralized, and is not capped:
Talking about the advantages, we shouldn’t forget to mention that its main strength lies in its decentralized and transparent structure. Etherium empowers investors to make deals without the active involvement of the central bank, thus helping the users to overcome restricting regulations, avoid any unfair transaction fees, and deal with censorship which is indeed a real issue worldwide. Unlike Bitcoin, ETH offers practical utility and it is not capped.
- ETH2 (Ethereum 2.0) is all set to be launched: Finally, the biggest reason for an early investor to invest in ETH in 2022 is ETH2! It is believed to be completely launched by the year-end or early 2023, and experts say that it will do wonders for the Ethereum price. This upgrade will witness the transition of ETH from the PoW (proof of work) to PoS (proof of stack) making this cryptocurrency more secure, scalable, and sustainable.
Cons of investing in ETH
Just like other cryptocurrencies investing in Ethereum isn’t risk-free either. There are certain downsides to investing in ETH, let’s take a look at them.
- Developers have gravitated away from ETH due to the high transaction fees:
2021 witnessed congestion on the Ethereum network, which resulted in pushing the transaction fee to extraordinary levels. This caused some of the developers to move towards other options with more stable fees.
- The smart Contract arena has become highly competitive: Even though Ethereum was the flagship bearer for merging smart contracts with blockchain, they are no longer the only player in the market now. Potential competitors like Cardano and Binance Coin are now offering a cheaper platform to build smart contracts when compared to Ethereum, thus posing a threat to Ethereum’s stand in the market.
The purview to buy ETH in 2022 totally falls on an individual, we hope the above pros and cons will help you make a manageable decision.