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3 reasons why I invested in Ethereum / $ETH

3 reasons why I invested in Ethereum / $ETH
Photo by Art Rachen / Unsplash

3 Fundamental Reasons to Invest in Ethereum

1. Ethereum represents freedom from the Establishment

Ethereum is the decentralized, permissionless and uncensorable internet of the future. It is controlled by no single entity and also has a deep ecosystem. Ethereum is not just a cryptocurrency, but also a platform that allows developers to build decentralized applications (dApps) on top of its blockchain. This has led to the creation of a wide range of dApps (e.g. Uniswap), including decentralized finance (DeFi) protocols, non-fungible tokens (NFTs), and gaming platforms. The growth of this ecosystem has been decent, and it shows no signs of slowing down.

2. Ethereum has an easy-to-understand programming language

Another advantage of Ethereum is its programming language, Solidity. Solidity is a high-level language that is easy to learn and use, making it accessible to developers of all skill levels. This has helped to fuel the growth of the Ethereum ecosystem, as more developers are able to build on top of the platform. In my spare time, I am also picking up Solidity.

3. Ethereum is a good diversification option

Investing in Ethereum can be a good diversification option for your portfolio, and hence I have set a 30% allocation to crypto assets. The other great thing about Ethereum is its consensus mechanism known as Proof-of-Stake.

Ethereum through Proof-of-Stake derives its crypto-economic security from a set of rewards and penalties applied to capital locked by stakers. This incentive structure encourages individual stakers to operate honest node operators, punishes those who don't, and creates an environment where the network can agree on the state of the blockchain.

Staking Ethereum can be a good idea if you anticipate holding Ethereum over the long term, as it can boost the total ETH you hold. I personally stake my Ethereum and earn a yield of around 4.6% annually—just like interest from a bank. When compounded, this can amount to more ETH and lowering your average cost of investment over time.

Ethereum is a cryptocurrency with a lot of potential (10x). Its deep ecosystem, easy-to-understand programming language, and diversification benefits make it an attractive investment option. However, it's important to remember that cryptocurrencies are highly volatile, and investing in them carries significant risk. As with any investment, it's important to do your own research and make informed decisions.