Ergo (ERG) is a relatively unknown cryptocurrency, which is surprising given that it has been around for quite some time and is backed by a strong team. It is a programmable blockchain with advanced smart contract capabilities that are ideally suited to the Decentralized Finance (DeFi) industry.

So far, he seems to have favored technical development to the detriment of marketing. However, the coin has seen a significant price increase again this year and has been listed on two additional cryptocurrency exchanges.

What does Ergo do?

The best way to understand Ergo is that he designed smarter smart contracts. Smart contracts are tiny pieces of code that rely on the blockchain and make it programmable. They offer a way to develop apps and other cryptocurrencies that run on blockchain databases.

But this is an evolving technology, and some smart contracts work better than others. For example, Ergo’s coding script can specify how the money can be spent. It will be able to manage complex contracts more securely than many of its competitors.

It has a lot of applications in DeFi, such as stable coins. Ergo is also developing its own Decentralized Exchange (DEX), where users can exchange coins without involving a middleman.

Should we buy it?

Ergo’s price has increased significantly so far this year, but that’s not necessarily a good reason to buy it. You need to assess whether you think this is a good long-term prospect. Here are some questions to consider before purchasing Ergo.

What do you think of the Ergo team?

When looking for a cryptocurrency, the management team is a good place to start. Ergo has a strong team with good blockchain experience. Its two co-founders, Alexander Chepurnoy and Dmitry Meshkov, have already worked on a number of cryptocurrency projects.

Do you understand what problems Ergo wants to solve?

This can be a difficult question with digital currencies as you might need a good level of technical knowledge to see what sets a coin apart. In Ergo’s case, he says his system allows him to do things other smart contract platforms can’t. For example, it can maintain privacy without compromising security.

It also offers developers a way to avoid the unpredictable (transaction) gas fees found on other platforms like Ethereum (ETH). Ergo has a lot of online resources. Take the time to read them, educate yourself on the things he wants to do, and decide if you think he will be effective.

Are you investing money that you can afford to lose?

It’s a good idea to make sure you’re up to date on your retirement savings and emergency fund contributions before buying crypto. No one wants to find themselves in a position where they can’t pay rent or retire at their expected age because they’ve taken too many risks with crypto investments.

All cryptocurrency investments are risky, but smaller coins carry more risk of failure, so be careful. Cryptocurrency should only ever be a small percentage of your overall investment portfolio.

Have you looked at the competitive environment?

There are two markets to study when it comes to Ergo: DeFi and programmable cryptocurrencies.

Ethereum is by far the market leader in programmable blockchain. It was the first crypto to introduce smart contracts, and nearly 3,000 apps are built on its system. However, its network is congested and its current mode of operation is not very sustainable. It won’t complete a major upgrade to fix these issues until at least 2022.

See how Ergo stacks up against other players including Cardano (ADA), Polkadot (DOT), EOS (EOS), and Neo (NEO). Each has their own advantages and disadvantages, but it helps to see Ergo in the context of its competition.

The DeFi environment is booming, and there are a host of decentralized financial applications working to transform the way we do our banking. However, there is also talk of increased regulation of DeFi, as authorities want to prevent bank-type branches from operating without customer protection.

Are you comfortable with buying a smaller cryptocurrency exchange?

Ergo is not available at most major US cryptocurrency exchanges, so you need to buy from a smaller exchange or decentralized trading platform. It can be slightly riskier and also more expensive as you may have to pay gasoline fees for the trade.

The bottom line

Developing amazing technology is one thing, and it looks like Ergo can have a lot of real-world applications. But the big challenge for the Ergo team is commitment.

Here are some of the obstacles ahead:

• Get more developers to use its ecosystem.
• Complete its decentralized exchange and get people to use it.
• Include ERG on more cryptocurrency exchanges.
• Establish partnerships with other DeFi projects.

Ergo has an engaging community and team, but they have their work cut out for them to make sure Ergo shines in a crowded marketplace.

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Emma Newbery owns Bitcoin, Ethereum, Polkadot, EOS, NEO, and Cardano.

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