Does it makes sense to buy #ETH now?

A very simple gaming analysis could give the answer, please don’t take it as a financial advice :)

Ethereum is a decentralized, open-source blockchain with smart contract functionality. Ether (ETH) is the native cryptocurrency of the platform. Amongst cryptocurrencies, Ether is second only to Bitcoin in market capitalization today.

Now let’s imagine a roulette wheel (without zero or double zero) where we place a $1 chip on one of the 36 numbers on the table. We have 2 possible outcomes: we got it right and our prize is $36 or we lost $1.

This type of game is called “A Fair Game” and it happens when the player's “Expected Value” is equal to zero, when the bet is equal to the prize multiplied by the probability of wining: -$ 1 + ($36 * 1 / 36) = 0

In the case of ETH, although it is not a “game” (or zero-sum game), one might think that after x time it should be worth much more than today or practically zero if it would not be adopted as the main cryptocurrency in the financial world.

If the Expected Value of this “game” is equal to zero, it could be considered a “fair game” and the following equation could be used to decide whether to play the “ETH game”: Current Price = Future Price * Probability that ETH becomes the main asset in the financial world.

ETH is worth today around $4.000 so you could think about different Future Prices for ETH and then calculate the implicit probability in each case:

Future Price => Probability that ETH becomes massive.

$ 20,000 => 1/5

$ 100,000 => 1/25

$ 500,000 => 1/125

$ 1,000,000 => 1/250

Conclusion: if you think that there is 1 chance in 250 that ETH is going to have a mass adoption in x time, then it would be rational to “play the ETH game” and invest $4,000 today to get $ 1,000,000 in the future.

Source: In Feb-14 I wrote a similar post about BTC when the price of BTC was $625, almost 1/100 cheaper than today :)

https://medium.com/@gabrielgruber/tiene-sentido-comprar-bitcoins-bdf5ea13a6b5