The year 2017 was a landmark one for Ethereum. Not only did they launch and sustain a steady stream of new communities and products, but they also worked hard to ensure mainstream media and other influencers took notice.
Ethereum’s success can be attributed to its ability to solve practical problems and provide real value.
What was once thought to be science fiction is now a possibility thanks to blockchain technology and Ethereum.
Here, we’ll break down the value of Ethereum and how much you’ll need to survive in the Ethereum community.
The Value Of Ethereum
First, it’s important to understand what makes Ethereum so valuable. It is one of the few cryptocurrencies that provide a genuine use case and solve a real problem. For example, if you want to create a decentralized app that connects owners of different properties (shares, apartments, etc) and allows them to transact directly from within the app, without the need for a third party (like a bank), then Ethereum is the platform for you.
Ethereum can also be used to create smart contracts or automated transactions that can’t be altered once set in stone. This aspect alone makes Ethereum more valuable than other cryptocurrencies. So if you’re looking to store large sums of money or want to fund your next purchase, you can’t go wrong investing in Ethereum.
Nowadays, the price of Ethereum fluctuates a lot based on the market environment and a few other factors. However, for the most part, the price of ETH tends to track the cost of Bitcoin.
Since Ethereum is a relatively new cryptocurrency, there is very little history to reference. However, in the case of Ethereum, you can look at the price of BTC as a benchmark, seeing as the 2 currencies often move in tandem. (1 BTC is often equivalent to about 100–200 ETH at current prices).
To follow the price trend of Bitcoin (and therefore, Ethereum) it is recommended to monitor Bitcoin’s Cost (BTC) vs Ethereum’s Price (ETH) charts, keeping in mind the the correlation does not imply causation. In other words, you shouldn’t expect the price of ETH to always follow that of BTC and vice versa.
Mining For Ethereum
Anyone who purchased a GPU (graphics processing unit) in the past few months is sure to be familiar with the process of mining. (If you’re not, mining is the act of trying to solve complex mathematical problems in order to verify and approve transactions on the blockchain.)
While it’s not necessary to mine Ethereum in order to use it, the process does provide you with the necessary tools to do so. For those who want to learn more, Ethereum provides a detailed guide on how to mine Ether.
Ethereum is a bit of a mixture when it comes to demographics. (As with most cryptocurrencies, it is largely driven by the collective opinions of its user base).
Most of the people using and investing in Ethereum are young, male technology enthusiasts. (In fact, nearly 80% of Ethereum’s users are male.) This is likely due to the digital currency’s original use case—as a tool for tech-savvy, young people who were already invested in Bitcoin and looking for a new challenge.)
Ethereum’s largest user base (45.3%) is located in the United States. (Although the currency is gaining popularity worldwide, with the exception of Africa and Japan)
Where To Buy Ethereum
With the above fundamentals in mind, let’s take a quick look at where to buy Ethereum. While there are several places you can purchase the cryptocurrency, the most popular option is through a digital currency exchange.
If you’re looking to buy Bitcoin or Ethereum, it is best to conduct your search on a site such as Coinbase. (Or if you prefer, an app on your phone). When buying via these services, you’ll have to provide some basic information (name, email, etc)—as well as validate your identity with two forms of ID (such as a driver’s license or passport).
Depending on which country you live in, laws and regulations may apply regarding the possession of cryptocurrency. (Additionally, not all cryptocurrencies are available in all countries). Before you begin your trade, it is essential to do research about local laws and know your own personal legal obligations.
Now that you have some idea of the fundamentals of Ethereum and how much it’s valued at, let’s take a quick look at how you can actually use it. (Again, if you’re not familiar with Ethereum, this article can quickly become obsolete—so be sure to familiarize yourself with the basics first).
As mentioned above, one of Ethereum’s most valuable characteristics is its ability to provide a solution to a problem. So let’s take a look at how that plays out in practice.
If you were to use Ethereum to create, say, a decentralized app for sharing music, you would start by creating an account on the Ethereum blockchain. Once you’ve set up your account, you can begin to create a new ‘contract‘ or set of rules that govern the sharing of music between users. (In this case, you could create a contract that defines how much each piece of music is worth and determine the rules of the game: How many times a person can listen to a song before it can be rated as ‘used‘ or ‘shared‘? How about if there’s a popular song that isn’t available on Spotify? Can you upload it to the blockchain and have other users rate and listen to it? Etc.)
Once you’ve established the rules of the game (which can be automated if you like), you can begin to populate it with music. If you were to use a service like Spotify or Google Play Music, you can integrate their APIs to add music directly to your app. Alternatively, you could use a smaller, independent music distribution platform. (As with most cryptocurrencies, the options for music distribution are endless.)
Now that your app is live and populated with music, you can begin to engage with your users. As part of the deal, you could give them access to exclusive content or provide premium features for paying subscribers.
An important point to make is that even though you’ve locked down the details of the game (such as how much each piece of music is worth, the rules of the game, etc), the music itself is still completely free—there are no such things as ‘free copies‘ in the music industry. (This is why you should always own the copyright of your music, even when you release it in exchange for a nominal fee or provide it for free as part of an app or game.)
How Much Does Ethereum Cost?
So you’ve got your Ethereum. Congratulations! Now, let’s take a quick look at how much does Ethereum cost? (Hopefully, by this point, you’ve already figured out that the answer is a lot.)
Unlike most currencies, the cost of Ethereum is based on its market value, not the price of a single coin. (This is because the value of Ethereum is constantly changing. There is no set price for Ethereum—it is entirely based on supply and demand.) So if you’re curious, you can check the price of a single coin on an online exchange or on CoinMarketCap.com.
However, if you want to figure out the cost of Ethereum in USD, you can use an online converter like XE.com. (Incidentally, if you’re looking for a single exchange to trade Bitcoin and Ethereum, check out Binance.com. It’s the largest cryptocurrency exchange at the moment, and the one most people turn to when they want to buy or sell virtual currencies.)
Is Ethereum Worth It?
Now that you’re invested in one of the most popular cryptocurrencies, let’s take a quick look at whether or not Ethereum is actually worth it. This largely depends on your investment goals and the type of returns you’re looking for. (Keep in mind that just because something is worth a lot does not mean it’s necessarily a good investment—it all depends on the ROI or ‘return on investment‘.)
If you’ve been reading our blog for a while, you’ll know that we’re big believers in the power of the blockchain and cryptocurrency. (As a matter of fact, we were one of the very first publications to write about Ethereum back in 2015.)
In that case, we’d recommend you keep your investment in Ethereum and meet the returns you’re looking for. (Again, there is no set formula for determining when something is ‘worth it’—this is something you’ll have to decide based on your personal circumstances and investment goals.)