I have already won $ 6,000 on Ethereum. This is why I keep holding on

I first bought some Ether, the tokens that help fuel the Ethereum (CRYPTO: ETH) network, back in 2017, when cryptocurrencies were still a fairly new concept to most retail investors. I naturally sold a bit early without really seeing the big picture, but ended up owning a bit more of a long-term Ethereum, and wish I had bought more. Now seeing the potential of cryptocurrencies in general, I plan to continue to own Ethereum with the belief that it is a cryptocurrency that can go much higher. Here’s why.

Real world utility

Yes Bitcoin (CRYPTO: BTC) is the proof of concept for blockchain and cryptocurrencies, then you could say that Ethereum is the proof of concept for programmable blockchain where applications can be built on the network. These applications include smart contracts, which are automated contracts that cannot be changed after they take effect. One use case for smart contracts on Ethereum is non-fungible tokens (NFTs), which allow things like artwork and sports collectible cards to be tokenized and secured over blockchain in the sense that it doesn’t there can be no duplicate of this specific copy.

While I’m not sure what to think of NFTs, and their price seems pretty inflated, I could also see a world where they continue to grow in popularity and become more mainstream. After all, an NFT can boil down to a digitized work of art or an image or video capturing a moment in time, among other digital files. Is it that different from art or collectibles now? Their value comes mainly from what people are willing to pay to own them, whether as part of a collection or to decorate our homes. But with the world becoming more and more digital every day, that means future generations won’t want to have those same collectibles to show off all of their friends, colleagues and contacts online and virtual.

Even though NFTs aren’t taking off, smart contracts have many other potential use cases, including, but not limited to, enforcing contracts with landlords and tenants, automating customer claims. insurance, speeding up the mortgage process and removing barriers to investment.

Image source: Getty Images.

Ethereum 2.0

The other thing that really excites me about Ethereum’s long-term success is the massive set of network upgrades that the developers have been working on for years.

Ethereum 2.0 plans to make the network “more scalable, more secure, and more sustainable,” according to Ethereum.org. The system will be more scalable as it can process more transactions per second. Currently, Ethereum can only process 15-45 transactions per second. After the upgrade is complete, the network may be able to process up to 100,000 transactions per second.

The other big upgrade will be the transition from the power-hungry proof of work concept that currently uses massive amounts of computing power to mine new tokens that power and validate the ledger. Ethereum 2.0 will see the network adopt a new concept of proof of stake. As proof of stake, the current owners of Ethereum wagering tokens they own and then become the participants on the network who agree to transactions made on the ledger and create new blocks. Not only will staking make the network more sustainable, it will also improve security as it will make it easier for more Ether owners to become validators on the network, and the more validators, the more decentralized the network is, which makes it less likely to succumb to an attack.

Hold out for a long time

Although I have made solid profits from my Ether tokens, I still think there is a long way to go due to the real usefulness of Ethereum, as well as how Ethereum 2.0 positions the network on the long term. As we see how Ethereum can be used in the real world with the deployment and popularity of NFTs, there are still many other ways that smart contracts can impact many other industries and make our lives more efficient, such as is why I plan to own Ethereum. at present.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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