First came Bitcoin, which took the world and more importantly the financial industry by storm. Aside from enjoying the first mover advantage in the crypto space, it has paved the way for other remarkable cryptocurrencies like Ethereum (ETH) . In fact, Ethereum currently holds the second spot out of more than 1,300 digital currencies in the world. Although it shares some similarities with bitcoin, there is more to Ethereum than meets the eye. Herein is a rundown of all what you need to know about this cryptocurrency:
What is Ethereum?
In essence, Ethereum encompasses an open source that is based on a publicly disclosed blockchain platform with scripting functionality. Ether is its cryptocurrency. Whereas Bitcoin was designed as a store of value or means of payment, Ethereum acts as a platform through which individuals can use Ether tokens to build and run decentralized applications, and more precisely, smart contracts.
A smart contract entails a computer code that can allow the exchange of content, shares, property, money or any other valuable item in a transparent manner that keeps third party interference, fraud, and censorship at bay.
When, How and Who Created Ethereum?
Vitalik Buterin, a cryptocurrency programmer and researcher, created Ethereum in 2015. Initially, he described it in a white paper that he wrote in 2013 with a mission to develop decentralized applications. After failing to garner the desired agreement, he recommended the creation of a new platform featuring a more general scripting language.
The official Ethereum software development project kicked off in early 2014 with the help of Ethereum Switzerland GmbH, a Swiss company. Funding for the development was done via an online crowdsale that took place between July and August the same year. The system later went live on July 30, 2015, with about 11.9 million Ether coins that had been pre-mined for the crowdsale.
What Technology it Uses and Some Big Investors behind Ethereum
Ethereum relies on its main innovation dubbed the Ethereum Virtual Machine (EVM), which acts as its runtime environment for smart contracts. Thanks to this software, developers can run any of their programs irrespective of the programming language. EVM allows the development of thousands of different applications on a single platform.
Ethereum enjoys massive backing from the Enterprise Ethereum Alliance (EEA). The members include Samsung SDS, ConsenSys, Microsoft, J.P.Morgan, Intel, Cisco Systems, and MasterCard among many others.
Price Changes in 2017 and then in 2018 up to Current Date
From the above graph, 2018 appears to have been a remarkable year for Ethereum, as it surpassed the $1,000 mark cementing its second position in the crypto world.
Since its impressive performance in early January 2018, Ethereum has experienced considerable price fluctuations. As shown above, the cryptocurrency’s price on April 2, 2018, stands at $379.655 with a market cap of $37,867,061,771.0.
What is the Future of Ethereum?
Although this expectation may seem a little far-fetched, Ethereum is proving to be a worthy competitor for bitcoin. Bitcoin’s emphasis on payment technology appeals some governments like the Japanese and Chinese government. Alternatively, leading corporations are interested in applying the technology behind Ethereum’s smart contracts in the real world. Ether’s endorsement by such companies including members EEA shows the potential of its technology.
Ethereum and Bitcoin currently utilize the Proof of Work system to validate transactions. Since this method needs an expensive amount of computing power and electricity, Ethereum hopes to shift to a cost and energy efficient technique, Proof of Stake system, by the end of 2018. If successful, this move could outdo bitcoin considerably.
Ethereum allows developers to create decentralized apps (DApps). The more DApps built, the more the rise in the value of Ether. What’s more, Investing Haven’s research team anticipates the number of DApps to increase 20-30 fold in the next 5-7 years.
Is Ethereum Good for Long Term or Short Term Investment?
Similar to other cryptocurrencies like Bitcoin and Ripple, the value of Ethereum is highly volatile. The price of an Ether can rise or drop significantly within a short time. This attribute makes it a poor choice for short-term investment.
Ethereum is more than just a cryptocurrency; it’s a platform for creating and deploying different applications. Combining this ability with its increased backing from leading corporations including the Enterprise Ethereum Alliance presents a potential implication for long-term success. As such, it is best to consider Ethereum as a long-term investment.