Cryptocurrency prices are surging right now.
Bitcoin is the big one that people know about, and it has had a spectacular year.
Bitcoin is currently sitting at $2,239.19.
When it hit $1,580 on May 1st, it traded at record highs. Now, it’s almost $700 over those records, jumping more than 100% in the past two months.
If you invested $100 in Bitcoin seven years ago, you’d have $75 million now. Some say that it will hit $10,000 or even $100,000 per bitcoin.
But there are other cryptocurrencies that could have that kind of ceiling, too. I want to talk about one of them — Bitcoin’s lesser-known cousin, Ethereum.
Ethereum is similar to Bitcoin, but it isn’t a currency per se. It’s actually an open-source computing platform that uses smart contracts.
Like Bitcoin, Ethereum is a distributed public blockchain network. Although there are some significant technical differences between the two, the most important distinction to note is that Bitcoin and Ethereum differ substantially in purpose and capability. Bitcoin offers one particular application of blockchain technology, a peer to peer electronic cash system that enables online Bitcoin payments. While the bitcoin blockchain is used to track ownership of digital currency (bitcoins), the Ethereum blockchain focuses on running the programming code of any decentralized application.
You might have heard people refer to Ether, as well. Ether is Ethereum’s currency, a way to pay for transactions and a tradable cryptocurrency.
Ethereum has had a shocking six months.
In January, it was trading for $8.
Now, it’s trading for $226.94.
Investors are buying into Ethereum for several reasons. First, we’re moving toward a cashless society, and investors are realizing the value of open-source public platforms for banking and businesses.
Second, investors are also starting to use cryptocurrency as a safe haven investment (similar to gold) when markets are uncertain. And with the divisive U.S. and French presidential elections, tensions increasing with North Korea, and the U.S. dropping our largest non-nuclear weapon on Afghanistan, we’re living in times that cause demand to jump.
The last and perhaps most important reason for investing in Ethereum is something called blockchain.
You see, one of the main problems with Bitcoin is hacking. Because everything is online, it’s very susceptible to hacking and that makes investors wary.
The blockchain is supposedly unhackable. According to Newshub:
The Ethereum project is using that Blockchain software to create so-called "smart contracts" that can self-execute. It has the potential to cut out the middlemen like banks and lawyers in transactions, revolutionising major industries.
The release of the blockchain has led to more security for electronic currencies. And that's one reason that people are jumping onto the cryptocurrency train, which makes the markets jump.
Of course, caution should be used when buying into cryptocurrency. It’s a relatively new market. Even Bitcoin, which is currently the most solid cryptocurrency, has had severe ups and downs (in January, it fell nearly 30%), which should be considered before you make a purchase.
There’s also the issue of hacking. While no one has been able to hack the blockchain yet, that doesn’t mean that it can’t be done. And while the lack of control by central banking systems is one reason people buy into cryptocurrency, it also means that it’s not regulated or insured.
That said, there is obviously big money to be made when buying into Ethereum. Just make sure that the site you use is secure and that the money you put into it is money that you can afford to lose.
You can buy ether directly on Coinbase's website. In fact, that’s how I made my recent purchase of ether. You can link it to your bank account or pay via a credit or debit card. Simply put in the amount you want and then select Ethereum. You can also purchase bitcoins and litecoins on Coinbase, although both come with their own issues and cautions.
If you want to buy into cryptocurrencies, click on this link and you’ll get $10 worth of bitcoins for every $100 that you buy.
Here’s to the Ethereum millionaires. May we all become them.