We all want our investment in cryptocurrencies to pay off, but Ethereum’s crash may actually be more beneficial to your investment portfolio in the long run.
Lower prices help shake out scamcoins.
With low prices, and the lowest funding for ICOs in 16 months, shady projects are less likely to distract you into trying to make a quick profit. If overall sentiments in the market are lower, it discourages scammers from entering and wasting your time and money. We don’t need more investment opportunities, we need more knowledge to ensure our investments are the best available.Carboneum network is one way to do this.
Healthy investment is good for a company, speculative investing often leads to ruin.
After the massive crash last December, many people were discouraged about cryptocurrencies, but the damage to the underlying networks was substantial as well. With governments moving to ban cryptocurrency investments left and right, it hurts the possibility for a healthy ecosystem to develop that can deliver on the ideals of trustless, decentralized networks.
In other words, the fear and madness created by people investing beyond their means could destroy interest and use of this groundbreaking technology. If you believe in the future of digital money, as we do, then fear and madness is the last thing you want in the market.
Development teams can get more done when there’s less shouting.
When development teams are constantly attacked by people both online and offline, they can get easily discouraged.
Most developers working on blockchain networks today are trying to solve problems that have never before been seen in human history. That’s a huge pressure in itself, but imagine lumping on top of that the constant complaints of investors asking, “When is it going to moon?” and “When are you launching?”
With a more patient community, its easier for dev teams to take their time, go slowly, and most of all, test their code. There have been many embarrassing, (and preventable!) hacks due to skipping simple testing and auditing of financial code. A lot of this is simply from the pressure to go faster from investors and management.
Going faster in factories leads to getting your fingers cut off.
Going faster in financial software leads to you losing all your money.
If you believe in a tokenized future, as Carboneum does, then taking your time to do it right is the only option.
Hope on the Horizon
Ethereum is still the largest and most valuable network in cryptocurrency today.
In fact, support for the underlying technology is stronger than ever.
Currently, 93 out of the top 100 tokens by market cap or based on Ethereum, which means owning Ethereum or mining it, is in some ways equivalent to owning the underlying asset of all other coins.
Furthermore, it is quickly forming the basis for regulated and government-friendly currencies. If you’re interested in more stable investments in a groundbreaking industry, then the recently announced Paxos Standard and Gemini Dollar stablecoins may interest you.
Ethereum is still the vanguard for digital scarcity -which was previously believed to be not possible. Non-fungible property tokens such as CryptoKitties and Major League Baseball collectibles show that unique, transferable digital assets are in high demand.
Furthermore, there’s one big “if” on the horizon that could make ETH even more valuable in the future than it is now.
Proof of Stake
In Ethereum’s current form, it uses Proof of Work (PoW) algorithm. This means that miners that keep the network running using tons of computer graphics cards running as fast as possible to solve hashing puzzles. However, there is substantial development in the works to move Ethereum to an entirely new consensus algorithm which would keep the network running.
This new kind of algorithm will ensure the security and stability of the Ethereum network (as well as all the coins and contracts that run on it.)
Dubbed, “Casper”, the new algorithm is planned to be In a Proof of Stake (PoS) algorithm, that has a large number of benefits. When the Ethereum network moves to a Proof of Stake algorithm, itâs likely that your tokens will actually be more valuable. Why?
In a PoS algorithm, the blockchain keeps track of validators (ETH holders), who essentially “vote” on the next block mined by one of several methods. The “stake” part is that in order to be considered a validator, you must lock some coins away. This makes them less liquid than coins sitting on an exchange, but they will earn a reliable percentage of the network block rewards. Because these coins are locked away, those ETH holders who have decided to be validators are incentivized to secure the network and ensure it runs smoothly. They are rewarded for their stake with ETH, similar to the way miners now are rewarded with ETH for solving hashing puzzles.
In a sense, this would create regular “dividends” that could be figured into any investment calculations.
But why does the Ethereum Foundation feel that PoS is so necessary?
Reduced energy requirements
Rather than burning as much energy as the entire country of Austria, as Bitcoin mining recently has, Proof of Stake secures the network using coin ownership, rather than hardware hashing puzzles. This would actually make it easier to gain some small share of block rewards, rather than investing in mining operations. It also reduces capital expenses in quickly obsolete mining hardware.
Instead of turning electricity resources into coins under a PoW algorithm, you turn coins into more coins.
Less need to issue new coins
If you have an asset and more of that asset is continually generated, you would expect is value to go down over time. All other things being equal, we should expect more of a resource to lower the value of any individual unit of that resource.
Switching to a PoS algorithm for Ethereum will likely lower the block rewards, meaning that every ETH will represent a greater percentage of the network.
So Should You Dump ETH Or ETH-Based Tokens Now?
If you plan on buying back in at a lower level- maybe.
However, if you’ve been sitting out recently, this may be a great time to move some of your portfolio into Ethereum, or other Ethereum blockchain-based technologies.
From the official Ethereum website, we can see the intent of the Ethereum Foundation and its developers and backers:
Ether is to be treated as “crypto-fuel”, a token whose purpose is to pay for computation, and is not intended to be used as or considered a currency, asset, share or anything else.
Outside of any speculation on it, Ethereum has strong potential to transform financial and networked industries.
Of course, Ethereum’s role as a financial asset is important regardless of what the Ethereum Foundation says, because strong interest (and network security) is driven by strong price performance. However, Ethereum’s promise for the future of digital settlements and tokens, regardless of any market fluctuations, is still strong, and we firmly believe that tokens and contracts based on Ethereum have a bright future.