Ethereum was often called Bitcoin 2.0 when it was in development, and it seems to be living up to its name. This can be mainly placed at the foot of how flexible Ethereum’s blockchain network is. Unlike Bitcoin’s protocol, which is designed for the cryptocurrency alone, Ethereum can do a lot of other functions.
Vitalik Buterin, Ethereum’s originator, first conceived of Ethereum as a blockchain network with a built-in programming language. He suggested that having this option available would enable organizations to develop smart contracts using the network. These contracts work as decentralized apps under no one’s control. This ensures fairness for all involved. However, running these programs eats up computing power. It would be unfair for members of the network to be not compensated.
This is where Ether comes in. Ether is the Ethereum network’s token of value. Developers use Ether to pay for the computing power to develop programs, while users who want to use programs on the network pay for their usage via Ether. In this way, Ether fuels the entire network. Ether is also rewarded like Bitcoin to miners, ensuring that there is always a supply of the cryptocurrency.
Upward price trend
Considering its importance to the Ethereum network, Ether has a lot of value tied up into it. Right now, the price of Ether is around $10 per token. That might be peanuts compared to the $400 price point of Bitcoin, but this must be seen in comparison to other altcoins. The third highest altcoin price is around $3 to $4, which is the current price of Litecoin. Ethereum is literally worth 300 percent more than its closest competitor, and it seems to be not stopping in its rise.
Analysts have taken a look at Ether’s performance and have projected that, as it stands, Ether does not seem to have a limit in its price rise. There are several factors that contribute to this continued progress. For one, there is a great demand for Ether. Ethereum is a growing network and it appears that everyday someone is developing apps for it and these apps need Ether to fuel their development and use.
Another reason for Ether’s rising price is that people are hearing good reports on Ether and are moving away from Bitcoin. The power of positive publicity is hard to beat, along with investments from large companies.
Licensed exchange opens
With the continued price increase of Ether, a lot of people are interested in developing Ether as more than a token of computing power but also as a full-fledged cryptocurrency. For this to happen, there needs to be exchanges for Ether to be converted into other currencies and for it to be bought and sold.
The Winklevoss twins of Facebook fame saw this need and have decided to invest in Gemini, the world’s first fully licensed Ether exchange. With a license from the New York State Department of Financial Services, Gemini is supposed to trade Ether for either US dollars or Bitcoin. Gemini is another exchange in the New York area that has received a BitLicense, alongside Coinbase and Ripple, which is another step in the right direction for greater acceptance of cryptocurrencies.
Ethereum is going from strength to strength. With its upward price trend, people should expect to see a lot more of the cryptocurrency in the future.