I understand that this is an investing platform and that ultimately, we all want to make a return on our investments. But, trying to understand Ethereum by looking at ETH (ETH-USD) technical charts is more akin to Plato's allegory of the cave.
Sure, at times, ETH is overbought or oversold, but I'm going to suggest that obsessing over technical charts (especially if the author is also shilling natural male enhancement, I'm not kidding about this) does more harm than good. If you are interested in investing in ETH, just follow these simple steps.
Let's think about this. According to Ethereum.org, Ethereum is a blockchain app platform that lets you make unstoppable applications. So, why would anyone need an unstoppable application?
I have a friend who lives in Nicaragua. Do you know what's been going on there since last month?
Students, people shot protesting the deaths of other students, journalists: all delinquents. The government shut down several TV stations in the first few days of protests. Other reporters were robbed, beaten and harassed. Several of the reporters I talked to said a lot of the aggression came when they were photographing the Juventud Sandinista, the FSLN's youth group, or police attacking protesters. - Ticotimes
What do you do when you live in an oppressive regime, and the state has the power to just turn off the TV anytime it might make them look bad? What if we re-thought media and had alternatives that were decentralized and censorship resistant, unstoppable even?
Several startups are trying to do just that. Take a look at Po.et (POE-USD), TV-TWO, and Peepeth, all powered by the Ethereum blockchain (this is not an endorsement of these projects, merely an assertion the Ethereum has created a way to make this a reality, and someone is actually running with the idea).
The really interesting thing about Ethereum is that it lets people be innovative. We really can't predict what people will create, and sure, some of it will be junk; but not all of it.
The Brave browser is an attempt to fix the broken online advertising model, in which bandwidth is wasted displaying ads that nobody wants to see, middlemen take huge profits, and your personal information is sold to the highest bidder. The idea is to start from a clean slate (Brave blocks ALL ads by default), and then replace the current system with a new one, in which users get paid for their attention while having their identity anonymized.
Imagine being able to say "Ok, I'll view your ads if you pay me." That's exactly what Brave does (or will do, it's still in the early days and there are some kinks to work out). Then, I can take the BAT that I get paid for watching ads, and support my favorite YouTuber, or blogger if I want to.
Will it work out? Who knows? But, this kind of innovation wouldn't be happening at the same velocity without a permission-less backbone like Ethereum.
"What do you get when you mix self-driving cars, cryptocurrencies, and AI? The self-owning car!" - Former Bitcoin developer Mike Hearn
Consider the radical concept in which a smart contract (originally conceived of as running on the Bitcoin network) could enable a self-driving car to engage in the following procedures:
Since Ethereum placed their focus on smart contracts, I think this concept would work much better as a DAPP.
Now, substitute the car for something else, like a drone. Imagine a drone that is controlled by a smart contract living on the Ethereum blockchain that delivers, oh I don't know, sandwiches. The drone pays for power to recharge itself and eventually buys a fleet of sandwich delivering drones.
This is kind of fun! What about a Roomba with a weed wacker attachment that trims your hedges and buys more Roombas with the crypto it earns? I think you are starting to get the picture.
This is the kind of thing that's possible today because of blockchain and smart contracts. At this point, the hurdles are not technical, but regulatory. Where do we go from here?
If you look at the current throughput of the Ethereum network, you might feel that the future is quite a way off since the number of transactions that can be processed is only about 15 per second. However, the nature of the technology is such that when scaling solutions are implemented, they have the power to increase the transaction capacity by orders of magnitude.
Right now developers are working on Plasma, Raiden, Sharding, and Proof of Stake. Each one has profound implications on its own, but taken as a group, the result might be earth shattering.
Imagine being able to instantly convert any digital currency into any other currency without having to trust a third party. Imagine a platform that could be extended to include things like banks, insurance, law, and technology ON TOP of a decentralized, global computing network with full transparency.
You see, it's not possible to build a decentralized, trust-less system on top of a centralized and closed system (like the one we have now). But, it is possible to build centralized systems on top of decentralized systems. What do I mean by this?
Many cryptocurrency enthusiasts think that cryptocurrencies are going to completely replace the banking and financial systems we have today. Perfect, because I'm sure our grandparents who don't own a computer have all the necessary technical skills to protect her cryptocurrencies from Russian hackers. No, what's much more likely is that the tech savvy will manage their own cryptocurrency, and the rest of the people will have a cryptocurrency bank account. Why not? In fact, it's already happening in Switzerland.
Ethereum is still a very new technology, but its growth has been astronomical, and I think it could actually change the world. That's why I'm long (ETH-USD), even though we may still be in the back end of a speculative bubble. This is value investing to me, buying something that you believe in which also has the potential to make you some money.
If you want to invest in the Ethereum network, find a price that feels good for you, DCA your way in, then hold for the long term. You'll sleep much better at night because you won't have any nightmares of inverted Fibonacci bat wings.
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Disclosure: I am/we are long ETH-USD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.