Is Ethereum Still the Best Investment in Smart Contracts?

Ethereum has consistently been associated with smart contracts and decentralized applications (DApps) which has seen it become the 2nd largest in terms of market value. Since its establishment in 2015, it has been the preferred destination for developers focused on building decentralised finance (DeFi) mobile applications, non-fungible tokens (NFTs), or any other innovative blockchain-based applications. As for Ethereum 2.0 advancement, which focuses on increasing the number of users and reducing energy consumption, many investors are asking whether they should still hold Ethereum in their portfolio and why.

For beginners who wish to break into the space and want to know which prospects there are, it is important to understand the basics of how to buy ethereum. In addition, Ethereum is one of the most sought-after cryptocurrencies that can be purchased in a variety of cryptocurrency exchanges such as BitDelta to mention a few and hence within both novice and experienced investors. The majority of the exchanges let people buy ethers in exchange with regular money like USD, Euros or GBP and even through other cryptos like Bitcoin. After the purchase, Ethereum can be kept in the security of either hardware wallets or in software wallets making it possible to tailor to the users’ security needs.

The Position of Ethereum in the Blockchain Framework

Ethereum blockchain invented the concept of smart contract for the first time, enabling smart developers to perform transactions an build Lana applications without the dependency of any third party. It is this innovation that paved way for many industries like financial services, video games and real estate making Ethereum the pillar of decnance. This has made the platform the developers go to option in spite of competition from other smart contract platforms due the programmability and the strong infrastructure that it has.

Nothing much can be said about the role of Ethereum and influence it has on the surrounding blockchain industry. Its capability to work with the smart contracts has accumulated millions of projects, from the decentralized exchange uniswap to the NFT market open sea. The strong developer ecosystem helped the platform to continue launching many functional dapps for real problems thus cementing the already strong position of Ethereum in the market.

Ethereum 2.0: The Way to Improved Scalability

One of the most pressing issues in Ethereum for a number of years has been the scale. A lot of traffic and more and more users and developers began to use this network and aimed for congestion, high fees for gas and in the same breath longer transaction times. Nevertheless, there is Ethereum 2.0, a series of advancements to operation in the proof of stake as opposed to the previous proof of work model.

A new consensus model that is more scalable and energy efficient is introduced in Ethereum 2.0. The shift to PoS removes the process of consuming massive amounts of power in mining, making Ethereum friendly to the environment. In addition to these, ethereum 2.0 plans to use sharding, a system that allows the splitting of the network into smaller units to allow cheaper and faster transactions.

Although Ethereum 2.0 will likely bring improvement on the scalability concerns within the platform, it is still quite under development phase. Therefore, given these enhancements, potential investors need to look at the potential that Ethereum will perform more efficiently than other emerging blockchain platforms.

Competition from Other Smart Contract Platforms

The position of Ethereum as the market leader in the smart contract ecosystem has prompted the emergence of other players who are bent on addressing the limitations of this platform, especially with regard to scaling and costs of transactions. Other platforms such as BitDelta are now getting better because of low-cost fees, high-speed transactions, and successful consensus mechanisms.

The well-known example states that one of the factors contributing to the attention given to Solana was a consensus mechanism known as Proof of History (PoH) which enables up to 65,000 Transactions Per Second (TPS). This has made Solana’s platform attractive for DeFi applications and also for NFTs, almost like the Ethereum’s platform. On the other hand, the Polkadot network pursues the interoperability of multiple blockchains, while the Cardano platform is focused more on security and the formal methods concerning smart contracts.

In spite of this nice competition however, the Ethereum blockchain is still way ahead of others in the measure of developer activities, community support, and TVL in DeFi. That underlies the fact that many of the projects which are initiated from other blockchains at some point get to be on Ethereum, which remains relevant. Other investors that wish to blindfold focus on the consideration of other platforms should first consider the potential of these competitors against the proven performance, history, and plan of Ethereum.

The two sectors mentioned above (Decentralized Finance (DeFi) and Non-fungible tokens (NFTs)) are in fact the most powerful among all the possible use cases of the Ethereum network.

The influence of the Ethereum blockchain in the Decentralized Finance and NFT sectors is quite unprecedented. Most of the DeFi protocols comprising lending platforms, DEXs, and yield farms operate on the Ethereum ecosystem. Such protocols allow the usage of credit, assets borrowing and trading without third-party institutions thus revolutionizing global finance.

Ethereum is still the king of all the blockchain interventions in the NFT space. An NFT is a representation of a unique digital asset, including an artwork, collectibles, and in-game items, that is bought, sold, and exchanged over the blockchains. The introduction of Ethereum tokens, namely ERC-721 and ERC-1155, has seen the explosion of NFT markets such as OpenSea and Rarible. Although there is stiff competition from Solana and Tezos which have launched their own NFTs, Ethereum remains the leader because of the first mover advantage and established infrastructure.

As DeFi and NFTs continue taking shape over time, Ethereum will still remain a key player in those industries, and thus, the decentralized finance and digital ownership emphasizes its importance in the present and future of those industries. Such an outlook would class Ethereum as an asset for such investors looking or rather betting on the inevitable future of such changes.

Security and Decentralization

Security and decentralization should be viewed as two factors in evaluation of any blockchain and Ethereum is strong in both areas. Thousands of nodes are scattered all over the world to sustain and protect the Ethereum network because it is predominantly populated. This makes it worth noting that the platform is censorship resistant and protects against sabotage, thus enhancing the level of trust and security enjoyed by users when using such platforms as compared to centrally governed ones.

In addition, the longstanding history of Ethereum’s security and stability contributes more towards its merit. Although every blockchain is susceptible to the risk of hacks and weaknesses, Ethereum has managed to appear as one of the most safe environments for both developers and users. Furthermore, due to the large number of developers who are working on this project, flaws within the system are quickly discovered and rectified so that the network does not collapse.

With more participants and organizations becoming increasingly active in the cryptocurrency sector, security and decentralization will be more critical components for assessing the worth of various blockchain platforms. When it comes to security and decentralization, features on which blockchain technology’s second generation relies, Ethereum has earned the respect of its customers which is a competitive edge over emerging players.

Is there still an investment in of Ethereum?

Even with the emergence of rival smart contract systems, Ethereum is still the kings. Its further developments, broader development community, and the fact that it drives the DeFi and NFTs markets make Ethereum an attractive asset for anyone looking to capitalize on future opportunities presented by blockchain.

Nevertheless, Ethereum too has its disadvantages. Most of the scalability issues which it has now are being targeted by Ethereum 2.0, but they still provide some leeway to the rivals who want to take up some shares of the market. Risks to growth also abound due to the fluctuations in the cryptocurrency space, which make investment in them risky, and potential adoption of limits on Ethereum’s development.

To sum up, the survival and radical development of Ethereum assist it in becoming one of the best investment options in the smart contract markets. Comparison of its upcoming network enhancements, coupled with the fact that it dominates several key blockchain areas, lets one predict that Ethereum will remain among the most successful cryptocurrencies for the many years to come.

Disclaimer: Trading and investing in cryptocurrency and related financial markets is not without risk and as such you should never put in more than you can afford to lose. Always seek qualified financial advice before making any investment decisions.