Ethereum is Slowly Taking over Bitcoin’s Market CapitalizationAdmin@ | November 22, 2017 | 0 | Finance
Cryptocurrencies have grown at an exceptional rate over the last few years. Many people have gained a lot of interest in cryptocurrencies following the booming price of bitcoin towards the end of last year. One bitcoin was trading for close to $20,000, which was the highest value of the digital coin since it was established in 2009.
While a lot of people have come to know about bitcoin, its popularity has also drawn attention to other cryptocurrencies looming in its shadow. Ethereum is the second most popular cryptocurrency and it is gaining traction really fast. Ethereum’s value has been on the rise and experts predict that it may overtake bitcoin’s market capitalization in the coming days.
The value of Ethereum grew by more than 5400 percent in a span of six months in 2017. The price of the digital currency grew from seven dollars at the beginning of last year to over 400 dollars towards the middle of the year. So, what is this currency that is slowly taking over the cryptocurrency market?
What is Ethereum?
Ethereum was developed by a 19-year-old Russian programmer in 2013. But the digital currency was not launched until 2015. The value for ethereum remained at ten dollars for the first two years. The price for the cryptocurrency started going up in 2017 until the value of one Ethereum surged to $1,400 in January this year. Just like other cryptocurrencies, the value for ethereum started falling back to around seven hundred dollars in the month of May this year.
Just like other popular cryptocurrencies, Ethereum utilizes blockchain technology. It features a decentralized platform where a wide range of applications can be developed. The platform is powered by smart contracts, which are programmable codes that are self-executing. These codes do not a third party to operate. Thus, unlike bitcoin which mainly functions as a digital currency, Ethereum seeks to expand the uses of blockchain technology. The increase in use and value of Ethereum can be attributed to several factors. They include:
Support of giant corporations
Ethereum is backed up by several giant corporations such as the Intel, Microsoft and J.P Morgan. These corporations are part of the Ethereum Enterprise Alliance, an initiative that seeks to standardize the use of the Ethereum for business applications. Many other organizations have since joined the EEA alliance. It started out with thirty members but now the membership stands at around 86. It, therefore, means that more people and corporations have gained faith in Ethereum. Some experts also suggest that it could soon overtake bitcoin regarding market capitalization.
Increased rivalry in the bitcoin community
The ongoing civil war in the bitcoin community is working in favor of Ethereum. Many Bitcoin community members don’t seem to agree on the issue of scalability. With the increasing number of transaction in the bitcoin community, members have been subjected to a longer waiting time and increased transaction fees. Most of these issues have been dividing the bitcoin community and it could soon lose the market capitalization to Ethereum.