For years, cryptocurrency has been a big-ticket news item in the tech industry to the point where it bled into mainstream cultural awareness. Due to the “crypto winter” in December 2018 and more recent world developments, it has fallen off the radar for most people who may have been following crypto, even if only as a fringe interest. Crypto is an extremely volatile and speculative investment, and in a time when many of us don’t know if we are going back to our places of work soon, or if we will have places to work, it’s lost its luster. I have been interested and was very active in the crypto scene for a few years before it took a dive. Then COVID happened, and it became even less of an interest due to the risk, so I’m not here to sell you on throwing money at crypto… nope, wait, I totally am!
No, don’t do that. If you have any interest, do your research and don’t expect a golden ticket to early retirement. I keep somewhat apprised of the projects I’m interested in, but it doesn’t mean I have any authority on advising people how to invest their money. What I want to talk about is a major change in one of the top cryptocurrencies that I have been a fan of for quite some time.
Ethereum is currently ranked number two in market cap by coinmarketcap.com (and most other sites that track crypto). It has been a top contender since its introduction in 2015. With a team of very smart people, the Ethereum platform has pushed passed many technical and bureaucratic hurdles and continued their roadmap to provide what is essentially a supercomputer available to anyone whose operations cannot be dictated by any geo-political party.
Cryptocurrencies operate by having transactions validated by anonymous, and decentralized parties. The two primary ways this is accomplished is proof of work and proof of stake. Proof of work requires people to mine the cryptocurrency. This requires expensive hardware and technical expertise to set up mining software to be profitable. Even with both of these, it is not cost effective at this time. Proof of stake requires people who own whatever cryptocurrency to “stake” their shares for a certain amount of time. During this time these tokens cannot be sold, but there is a reward provided, much like dividends from traditional stocks.
Ethereum has been in the process of transitioning from proof of work to proof of stake and seems finally ready to make the jump this year. This means that if you have invested in Ethereum, then you may have an opportunity to create some passive income by staking your shares (once Ethereum 2.0 actually goes live, which has been delayed MANY times). For those who have any Ethereum burning a hole in their wallets, it’s an opportunity. For those who don’t have any experience in crypto, well, maybe you learned….something? I wouldn’t recommend jumping in headfirst without A LOT of research. So good luck and godspeed.