The world of cryptocurrency is off to a rough start this year. Many investors are worried about the future value and stability of Bitcoin (CCC:BTC-USD) or other major currencies. But the Ethereum (CCC:ETH-USD) price is sure to climb again, just like it has before. There’s an excellent chance this cryptocurrency will reach its all-time high soon.
Though some would say that Ethereum is a sure bet for investors looking to make their mark in this volatile market, recent events have shown us just how quickly things can change. The radical change coming for Ethereum in 2022 will be like nothing we have seen before.
With proof-of-stake protocols, this once volatile and unpredictable crypto might take off as more people invest in it due to its stability and low costs. Ethereum has become the go-to cryptocurrency for developers to build and deploy smart contracts. With its bar-raising blockchain technology, it’s also powering more than just digital applications.
However, Ethereum may be facing two major problems that could hold it back. The first is a prolonged shift to proof of stake, originally scheduled for June. Secondly, some unforeseen issues with transitioning to Ethereum 2.0 necessitates more testing before release.
Apart from these issues, ETH-USD presents an enticing proposition for crypto investors.
Don’t sell your Ethereum just yet. There are times when the price of Ethereum goes up and down, but it’s important not to give in if you’re feeling tired from all these fluctuations.
The Future of Ethereum Is Bright
The high cost of gas in Ethereum is one major reason the network has not seen greater mainstream adoption. However, some competing networks offer lower fees — Solana (CCC:SOL-USD), and Avalanche (CCC:AVAX-USD) come to mind as examples. These may prove more attractive going forward as they grow their user bases.
Ethereum might be able to overcome its most significant weakness, which is that it requires an expensive and energy-consuming proof of work protocol. Unlike Bitcoin with its mining issue, Ethereum plans to move from the costly proof-of-work (PoW) system over time to a proof-of-stake (PoS) consensus mechanism.
This is a game-changer for Ethereum. The community has eagerly awaited this transition, and it’s almost here. With the upcoming release of Ethereum 2.0 comes many exciting features that will pave the way for a brighter future for crypto enthusiasts everywhere.
Ethereum’s rise to become the defacto standard for cryptocurrency has been meteoric. Not only does it dominate its notoriously volatile market. But Ethereum also happens to be king when it comes down to decentralized finance-based applications (DeFi) on top of blockchain technology. DeFi utilizes assets like money and securitized tokens without actually storing them themselves (like banks do). The new version of Ethereum will be up to 99% more efficient than the current one. It will also become faster and capable of handling far more transactions.
Along the way, investors will benefit from a series of upgrades. This isn’t a standard “buy the rumor, sell the news” situation. In the runup to these upgrades, Ethereum tends to do very well. And then, when the changes go live, the price tends to level off. So, you can time your investment accordingly.
Ethereum Is a Blockchain That Can Go The Distance
Blockchain technology is a powerful tool for managing and recording data. In its original form, it’s used as the foundation of digital currencies like Bitcoin. But there are many other potential applications too. Cryptocurrencies are built on blockchains that cannot do anything we want them to. Bitcoin’s blockchain, for instance, only supports trading between Bitcoins — it can’t handle other transactions.
Ethereum is a powerful blockchain platform that allows you to trade coins on the network or develop your apps with it. It’s complex but offers great flexibility and speed for launching new functionalities, thanks in part to its high level of programming accessibility, which makes this system fast-paced yet open-ended enough. Hence, it does not limit creativity too much.
Smart contracts are agreements that run automatically and are subject to certain conditions. They’re programmable, meaning you can use Ethereum’s blockchain for something other than just sending digital money back and forth — like executing a contract with an app. Smart contracts offer many possibilities for interacting with the world around us. They provide transparency and security because they run code that cannot be changed without being publicly visible (and therefore hackable). And since these transactions occur on a public ledger — meaning anyone from anywhere in anytime could potentially view them — there’s no need to worry about dealing directly with third parties like banks or intermediaries who might take their own sweet time getting things done.
This Sell-off Is an Ideal Buy-The-Dip Moment
Ethereum is a sophisticated blockchain that improves on its predecessor, Bitcoin. It was developed as an alternative to BTC-USD to improve all aspects and take it even further than before — this is done through constant innovation. The first cryptocurrency was BTC-USD. But it’s no longer the only game in town.
Ethereum has rapidly emerged as a popular choice for mainstream adoption due to its success within DeFi and high market share of non-fungible tokens (NFTs). The current year is a game-changing one for Ethereum because of its transition from proof of work mining to proof of stake. Therefore, you cannot afford to ignore ether.
On the publication date, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. You can check out his analysis on InvestorPlace and TipRanks.