Bitcoin and Ethereum
Bitcoin refers to an open source digital payment system which uses crypto-currency technology. Ethereum on the other side refers to public, open source, computing platform which is distributed based on blockchain technology which has smart contract functionality. Crypto-currency token "ether" originates from Ethereum where transfers can happen from different accounts to another and participants’ nodes can be compensated for any computation performed. Blockchain technology has come up with the new means of digital assets making investors be compensated at the protocol level. However, for blockchain technology to be effective a clear background understanding of coding, mathematics, cryptography and other resources had been a requirement. Bitcoin and other crypto-currencies have come to replace the traditional means of exchange such as the use of gold. The popularity has overgrown in large number over the past few years (Fairfield, 2014).
Network effect has benefited most people over the last 20 years as one could earn a lot of money with the use of the Internet. Much investment has increased with increase in users in the network. This result shows Bitcoin and Ethereum have also become popular. Bitcoin as an example, it is clear it carries added advantage which cannot be provided by the Country or other corporation while used over the network. One, there are no taxes charged and the opening of accounts are free as own private key is one which is considered. These crypto-currencies have minimal transaction fees and they always offer transparent and predictable clearing as the status of each transaction is known by the user. Personal identification information is not required and writes off of money is not possible. The limitation with such technology is that it can easily be programmed thus changing the value and quality (Fairfield, 2014).
Investment in blockchain has been the best means of investing since the internet was invented. With the development of technology and computing power shows there might be an increase in profit while investing in bitcoin. Implementing robots and artificial intelligence shows blockchain becomes easier in future thus creating a favorable economy for investors. To invest wisely in these technology currencies, one need to have a technical expertise on how crypto-economy works. Also, strategies need to be made on how the investment should be made to determine measures to follow through defining investment horizon. Then one requires finding the entry point as technology may erupt and people enjoy then it dissolves. The current rise in bitcoin is about 6.7% and investing in such technology requires a much critical decision as advised above (Fairfield, 2014).
Reference
Fairfield, J. (2014). Smart contracts, Bitcoin bots, and consumer protection. Wash. & Lee L. Rev. Online, 71, 35-299.
