There is one big reason Alexis Ohanian is a fan of Ethereum.
Reddit co-founder and venture capitalist Alexis Ohanian is probably more known for his marriage to tennis star Serena Williams and his advocacy of paternity leave than for his love for Ethereum (ETH). However, Ohanian has good reasons to believe in the second largest cryptocurrency in the world. Here’s why.
Why Alexis Ohanian loves Ethereum
The main reason Ohanian is excited about Ethereum is that he sees the potential in non-fungible tokens (NFTs). NFTs are a type of digital collection where ownership and copyright information is encrypted into the item itself. They are stored on the blockchain using small pieces of self-executing code called smart contracts.
Ethereum pioneered smart contract technology, and many alternatives to Ethereum have since followed suit. Smart contracts also allow networks like Ethereum to run decentralized applications (dApps) and other cryptocurrencies.
Right now, dApps, cryptocurrency, and NFT are all booming. One of the most expensive NFTs was Beeple’s “Everydays: The First 5000 Days” digital art piece, which sold for $69 million.
One of the powerful uses of NFTs – and one that drew Ohanian – is online gaming. Before NFTs, players could only purchase in-game assets to use in a particular game. Now, NFT allows players to purchase items they already own outside of the game as well.
Ohanian is a fan of a digital trading game called SkyWeaver. Based on the blockchain, SkyWeaver players own the digital goods they purchase in-game. Initialized Capital, the investment firm Ohanian co-founded, led a $3.75 million funding round for the company behind SkyWeaver in 2019.
Most recently, Ohanian wore CryptoPunk NFT at this year’s Met Gala. He tweeted, “Decided to bring #Cryptopunk for my wife (which I bought for her) to #MetGala.” CryptoPunks are small NFT avatars created on the Ethereum network that have sold for thousands or even millions of dollars. The Ohanian gifted NFT – from a black slut with a headband – to Serena Williams in August.
Ohanian launched a new venture capital firm called Seven Seven Six in June, and it already has several cryptocurrency projects in its portfolio. This includes an alternative asset trading platform called Alt, a Bitcoin (BTC) shopping rewards app called Lolli, and a decentralized internet company called QuickNode.
Should you buy Ethereum?
Ethereum is a cryptocurrency giant available from most cryptocurrency exchanges. However, she has been a victim of her own success. It suffers from network congestion and high transaction fees, which has prompted some developers to look for alternatives.
However, Ethereum continues to host the lion’s share of decentralized applications on its network and is the backbone of many decentralized finance projects. Ethereum is also in the process of an ambitious upgrade to improve scalability and reduce costs. The transition to Eth2 is expected to be completed next year.
Looking at the longer term, Ethereum’s competitors may eventually drop it from the top of the list. But it’s hard to underestimate the first-mover advantage of Ethereum – a lot of developers are used to coding on its platform, and newer platforms will have to work hard to attract them.
Assuming you are comfortable with the risks inherent in investing in cryptocurrencies, it would be wise to ensure that larger and more established currencies like Ethereum and Bitcoin make up a good percentage of your cryptocurrency portfolio. There are still risks – not least that upgrading Eth2 may encounter difficulties – but smaller coins carry more risks. You will also need to take into account the huge gains that Ethereum has already made and consider its potential for future growth.
Cryptocurrency is still a relatively new and unregulated market, so investors need to be prepared for volatility and the possibility of a bottom falling out of the market. That’s why it’s important to invest only money you can afford to lose, and be sure to keep up with your retirement savings and emergency fund contributions. In the end, only you know your risk tolerance and financial goals, so be sure to research carefully before spending any of your hard-earned cash.
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