Lots of crypto enthusiasts chose Ethereum as their main investment in 2022, according to ultrasound.money, we got ~$60m less ETH than there would’ve been given PoW. The trend will remain the same in 2023, according to new data.[1]
You may be wondering why this is happening. What makes this digital asset the top choice for crypto investors?
This article sheds some light on the issue. It reveals the most important features that make Ethereum one of the safest bets for 2023.
Take a look at the essential reasons to add Ethereum to your crypto portfolio [2] and enjoy the highest levels of security and privacy.
What Is Ethereum?
The adoption of digital assets is going great all over the world. Along with Bitcoin, Ethereum is a choice that lots of investors set eyes on.
Ethereum is a decentralized global software [3] platform that works via blockchain technology. The network is popular for its native digital asset called Ether (ETH).
People mostly use Ethereum to create secure digital technology. Developers created the token to pay for the work that supports the blockchain. Also, participants can use the digital asset to pay for real-life services and goods.
Ethereum is scalable, secure, programmable, and decentralized. This is the blockchain that developers and enterprises alike choose today. They create tech based on it. The main purpose of Ethereum is to disrupt technologies and our daily lives.
Ethereum supports smart contracts. This is an important term that stands behind decentralized applications. Decentralized finance and other applications use smart contracts together with blockchain technology. I’ll get back to this term later, don’t worry.
Ethereum Genesis – How Does ETH Work?
Vitalik Buterin is the man who is responsible for the creation of Ethereum. He published a whitepaper back in 2014. Buterin launched the platform the next year in 2015. [4]
He did this together with Joe Lubin. The latter is the founder of the blockchain software company called ConsenSys.
The duo considered the full potential of blockchain technology. It’s probably safe to say that they saw the future. The new technology can enable more than secure virtual payment methods.
Any developer who makes an application that benefits from blockchain tech can build it on the Ethereum network. [5]
Ethereum or Ether as a digital asset is now the second most important crypto. We say this in terms of market capitalization; ETH comes just after Bitcoin.
What Are Smart Contracts?
Developers who write programs on Ethereum are using self-executing and self-enforcing protocols.[6] These are smart contracts. You will see this term used a lot in conjunction with Ethereum.
These are deployed to blockchains powered by the Ethereum network. The computer network of the blockchain executes smart contracts. It does this by performing unique actions when they meet certain conditions.
You cannot alter the data on the blockchain after creation. This is what gives people the highest confidence in the technology.
What Is The Ethereum Merge? Ethereum 2.0
The Ethereum Merge [7] is another term that you will see a lot in the crypto industry related to Ethereum. This is a term created to define the network’s switch from the original Proof of Work system to a proof of stake system. It has already taken place.
When Ethereum launched, it used the same system, just as Bitcoin, in order to validate and record transactions. This was proof-of-work.
But there was a drawback – the extremely high energy usage, and this led to the change to a proof-of-stake network. During the Merge, Ethereum made the transition.
The main benefit is energy efficiency. The transaction speeds have also changed but not too much. Users will probably not notice this. Ethereum upgraded to ETH 2.0 [8] version during The Merge.
With this change, a lot of crypto fans felt bullish and hoped that the value of the digital asset would go straight to the moon. This has yet to happen.
Ethereum’s Safety Issues
Interest in crypto is growing all over the world. Ethereum is one of the top choices that investors pick these days. Safety and security are two essential words [9] when it comes to investing in digital assets.
Crypto can bring significant returns, but it’s worth noting that the risk of volatility in prices is real.
Here are the best security-related tips and tricks to remain safe and secure while investing in Ethereum.
- Use strong and unique passwords
- Get a password manager
- Get a Two-Factor Authentication
- Uninstall your browser extensions
The best ways to store your crypto involve hardware wallets. These also come with some security tips that you should follow.
- Don’t give out your private keys
- Use a hardware wallet
- Double-check transactions before pushing the send button
- Set smart contract spend limits
Ethereum’s Security And Privacy Following The Merge
I already detailed what The Merge process involved for Ethereum. It’s also important to understand how this process affects Ethereum’s security.
Blockworks notes interesting details in one of their pieces. This is called “What To Expect From Ethereum Security and Privacy After the Merge”. [10]
They bring up Alex Shipp, who is the chief strategy officer at Offshift. He said that what makes a PoS system resistant to hacks and attacks is that Ethereum’s native token is distributed all over the ecosystem. This includes various users, stakeholders, investors, developers, investors, and more.
Pros And Cons Of Ethereum
Here are the best arguments for investing in Ethereum in 2023.
- Boosted levels of interconnection for private individuals and businesses
- Tokenization to the world
- Running uncensorable apps
- Getting info via decentralization
- Diversifying your portfolio
Take a look at the challenges of investing in the digital asset.
- Security threats
- Involves risks
People Also Ask
How To Invest In ETH
One of the issues that people are interested in regarding Ethereum is, of course, how to invest in ETH. Well, you can buy ETH via a crypto exchange, a stockbroker, and a payment app that has ETH.
You will find the digital asset on almost all platforms that deal with crypto. Why? Well, because ETH is one of the most important cryptos out there.
Here are the most important platforms via which you can buy ETH:
- Crypto exchanges such as Coinbase, eToro, Binance
- Stockbrokers (Robinhood)
- Payment apps (PayPal, Venmo)
I believe that for crypto investors who are getting involved in the crypto space in a serious manner buying ETH via crypto exchanges [11] is the best option out there.
How To Keep ETH Safe
Long story short, you can keep your ETH safe by using a hardware wallet. This offers offline storage for private keys. This is the most secure option for storing private keys.
Keeping your private keys offline is able to massively reduce hacking risks. This happens even if a hacker gets control of your computer.
More than that, ETH has a low risk based on a recent analysis from Investors Observer. [12]
Should You Invest In Ethereum In 2023?
Suppose you are wondering whether ETH is a good investment at the end of 2022 and during 2023. [13] The short answer to this question is yes. Ethereum is a great investment, and such a move could end up paying off big time.
One of the main reasons for investing in ETH is the upgrade that took place, and we already addressed it – The Merge. The transition was successful, and lots of experts are waiting to see a price boost straight to the moon as a result of this upgrade.
ETH has plenty of room to grow, and now, it’s a perfect time to invest. Another reason for investing in the coin is the mass adoption of crypto and the underlying technology, the blockchain. This attracts more investors and institutional players as time goes by.
Closing Words – Friendly Recommendations
People see Bitcoin and crypto are merely a store of value. You can also transfer them. Ethereum, on the other hand, has more uses.
Let’s say that Bitcoin is a smartphone app. In this case, Ethereum is more like the device maker of the application.
The Merge has already reduced Ethereum’s energy consumption by more than 99%. I am confident that this makes it one of the best choices for investment in 2023, considering the rising interest in a green world.
The Merge was not able to make the transactions cheaper or faster. But it’s definitely paving the way for the next phase of the project’s evolution – the sharding. This cuts the network’s workload. It also boosts the transactions to 100,000 per second.
Ethereum is an innovative technology. I believe that will definitely change the world.
It’s already disrupting finance as we know it. How? By introducing smart contracts that allow users to make transactions without any third parties involved. This eliminates safety-related issues.
By introducing smart contracts, Ethereum will revolutionize computer programming. It will also disrupt digital ownership. I believe that digital identity is crucial these days. The term is strongly related to security online.
Ethereum has the ability to preserve security, safety, and our online identity. It’s also the best choice to diversify your crypto portfolio, so make sure to add some to your crypto stash!
References
[1] The era of tokenization — market outlook on a $24trn business opportunity https://medium.com/finoa-banking/market-outlook-on-tokenized-assets-a-usd24trn-opportunity-9bac0c4dfefb
[2] Brockman, K. (2021, June 3). 2 Reasons to Invest in Ethereum — and 1 Reason Not to. The Motley Fool. https://www.fool.com/investing/2021/06/03/2-reasons-to-invest-in-ethereum-and-1-reason-not-t/
[3] What Is Ethereum and How Does It Work? (2022, September 27). Investopedia. https://www.investopedia.com/terms/e/ethereum.asp
[4] What Is Ethereum and How Does It Work? (2022, September 27). Investopedia. https://www.investopedia.com/terms/e/ethereum.asp
[5] Brockman, K. (2021, June 3). 2 Reasons to Invest in Ethereum — and 1 Reason Not to. The Motley Fool. https://www.fool.com/investing/2021/06/03/2-reasons-to-invest-in-ethereum-and-1-reason-not-t/
[6] Brockman, K. (2021, June 3). 2 Reasons to Invest in Ethereum — and 1 Reason Not to. The Motley Fool. https://www.fool.com/investing/2021/06/03/2-reasons-to-invest-in-ethereum-and-1-reason-not-t/
[7] Brockman, K. (2021, June 3). 2 Reasons to Invest in Ethereum — and 1 Reason Not to. The Motley Fool. https://www.fool.com/investing/2021/06/03/2-reasons-to-invest-in-ethereum-and-1-reason-not-t/
[8] Cointelegraph. (2021, December 13). What is Ethereum and how does it work? https://cointelegraph.com/ethereum-for-beginners/what-is-ethereum-a-beginners-guide-to-eth-cryptocurrency
[9] Ethereum. (n.d.). Ethereum security and scam prevention. ethereum.org. Retrieved November 2, 2022, from https://ethereum.org/en/security/
[10] Liu, B. (2022, August 9). What To Expect From Ethereum Security and Privacy After the Merge. Blockworks. https://blockworks.co/what-to-expect-from-ethereum-security-and-privacy-after-the-merge/
[11] Daly, L. (2022, September 14). Investing in Ethereum Stock. The Motley Fool. https://www.fool.com/investing/stock-market/market-sectors/financials/cryptocurrency-stocks/ethereum-stock/
[12] Investors Observer – What is the Cryptocurrency Risk/Reward Gauge? https://www.investorsobserver.com/learning-center/what-the-scores-mean/what-is-the-cryptocurrency-risk-reward-gauge?ZLPFJ3ZnGdL3=reload
[13] Staff, H. (2022, September 3). Is Ethereum a good investment and should I buy ETH? HeraldScotland. https://www.heraldscotland.com/news/20893329.ethereum-good-investment-buy-eth/