As many of you know, we’re big users of Quora at Hivergent. We’ve been happy to make an impact on the Quora community and wanted to start sharing some of that content here. So every couple of weeks, we’ll do a wrap-up of the last couple of weeks of content on our Quora profile.
I think you can make a case for both sides (pro and con) for the rapid increase in Ethereum’s price. Here’s a short list of arguments:
Pro-Price Increase of Ethereum
- As the price goes up, many people who previously purchased Ethereum feel that their investment in the cryptocurrency was worth it. It gives them a sense that the system is strong and more likely to buy into the whole ecosystem.
- As the price goes up, more and more people from outside of the community start paying attention to Ethereum and want to learn about this ecosystem as a whole.
- As the price increases, many of the Dapp development organizations heavily funded with ETH get a larger fund to invest. This gives them them more time to deliver on their promises to their investors and team members.
Con-Price Increase of Ethereum
- As the price goes up, it also start to attract people who are interested in just making a quick buck, even if they have nothing to offer. This opens the floodgates to many entering the industry and decreasing the quality of companies overall.
- As the price goes up, applications running on Ethereum become more expensive to run and make the price more consistent. A Dapp might cost $.05 per contract to run today, but then cost $.25 in just a few weeks. This lack of consistency makes it harder to use Dapps, as you always have to be watching the price to know how much the application costs to use.
- If the price increases too fast, people start to get irrational, believing that they’re missing the boat. The Fear of Missing Out begins to hit hard, making them invest in something they don’t completely understand. These sorts of investors de-stabilize the market, because when the price drops, they will be the first to sell and may even believe the ecosystem has nothing to offer.
So even though people might be making a lot of money, there’s always the hidden downside that needs to be considered. I think most people who hold Ethereum want the price to go up, but this doesn’t mean there won’t be problems.
I think as a Data Scientist, you should care about Ethereum because of the growing need for people to understand their blockchain data.
In the Ethereum Network, every transaction that has executed will be available on the blockchain forever.
As more and more companies enter the industry, their businesses are going to rely on those transactions and how people are using them. They’ll start asking questions like:
- How many transactions can I expect to happen tomorrow?
- What is my forecasted Revenue from my smart contracts for the next month? The next three months?
- When is the most popular time for people to use my services to be used? Are there any services that are used more than others? When does that happen?
These are questions that require being able to pull data from the blockchain, manipulate it and present it to your business so they can make sense of what’s happening.
That seems like the perfect problem for a Data Scientist to solve.
Gold is very valuable because of how scarce and valued the resource is. Gold does not have a lot of uses outside of being a store of value, but this does not matter as people still want Gold. In cryptocurrency, BTC is like Gold, acting as a store of value.
Oil is valuable because it’s incredibly useful. The world runs on oil and needs it to operate. People do not want it the same way they want Gold, they need oil to run their lives. In cryptocurrency, ETH is a lot like oil because it’s long-term value comes from it’s utility.
I had never heard this analogy before, but I think it’s great at explaining why these cryptocurrencies are different but still valuable.
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