What Ethereum is, and why has the price of Ethereum gone elliptical?
Currently, the price of Ether, which runs on the Ethereum blockchain network, has seen tremendous growth compared to when its price had a drastic fall during the pandemic of Covid-19 in March 2020. Ethereum, only being five years old, is currently valued at 3355 dollars per Ether coin. This exemplary rise in the value of Ether is due to all of the leading digital coins getting enough investments. The leading crypto coins are also seen as a relatively safe store-of-value asset and a fine conjectural investment.
But a closer look at the rising price of Ether’s suggests that it had even outstripped the increase of the number one cryptocurrency, bitcoin, that had seen a seven-fold increase since March. Due to the up-gradation of Ethereum with new improvements and features being rolled out, Ether has significantly outperformed over the next few months. Let us get to the bottom of Ether and Ethereum and find out why this cryptocurrency is now valued more than corporate giants such as Starbucks and AstraZeneca?
Ether and bitcoin
Blockchains technology is a form of online ledgers that keep everlasting and safeguarded records of information. In blockchain technology, there are nodes that are similar to servers, but they are not controlled by anyone, these nodes always continuously verify these records. Among over 9000 cryptocurrencies, Ether is just one of the many that use forms of this technology. As Bitcoin was released in 2009, this new form of technology was invented by the anonymous “Satoshi Nakamoto”.
The concept of Ethereum blockchain was first introduced in 2013 by Vitalik Buterin, a 19-year old prodigy who was born in Russia but brought up in Canada. In 2014 through the method of crowdfunding, the development of Ethereum started, and finally, the platform was launched in July 2015. Then came the decentralized application that can be created using the Ethereum blockchain. These decentralized applications or “dapps” are developed by a community of developers and coders that are not attached to any organization or company. To bring any kind of change in the software, a community vote needs to be held using the consensus mechanism. Also, decentralized apps are purely open-sourced.
Ethereum is best known for the applications called “smart contracts”, which are currently running on the Ethereum blockchain. If certain conditions are met, these smart contracts automatically execute all or parts of an agreement. Let’s assume that a flight has been delayed for more than a stipulated amount of time, the smart contract could automatically reimburse a customer.
Right now, around 24 billion dollars are locked into various DeFi projects. Through various protocols like Compound, Aave, Yearn, users can borrow, trade, lend and invest through autonomous smart contracts. Additionally, Defi users can also generate income on their cryptocurrencies, especially their ether tokens.
The launch of Ethereum 2.0 can be considered the second-largest reason behind the Ethereum surge. This upgrade has been aimed to address major issues regarding the current version of Ethereum. To be more specific, it will significantly reduce the transaction fees that are particularly useful for Defi trading. In Defi trading, the cost of each transaction can end up equivalent to tens of US dollars.