Ethereum

#2
Price: $202.663876418
Change(24h):
-2.21%
Volume(24h): $1,337,801,271
Market Cap: $20,804,521,748
Ethereum was the first to create an open source blockchain platform that allows anyone to develop a decentralized app on it. It introduced smart contracts, enabling people not only to send money directly to each other but also to set conditions for the transactions. By allowing users to transfer information based on the outcome of events without the need of middlemen, smart contracts have limitless applications and have brought thousands of new apps on the Ethereum platform. ETH is based on PoW with a plan to move to PoS.

Latest Hight: $835.06

Ethereum Markets

# Source: Pair: Price:
1
Binance
ETH/BTC
$201.678514093847
2
Huobi
ETH/USDT
$201.97209153892
3
Binance
ETH/USDT
$202.01133990494
4
Bithumb
ETH/KRW
$206.73577123157
5
HitBTC
ETH/USDT
$202.03096408795
6
Bitfinex
ETH/USD
$212.88
7
Huobi
ETH/BTC
$201.613821707611
8
Huobi
EOS/ETH
$201.945687231461
9
GDAX
ETH/USD
$203.6
10
OKEx
ETH/USDT
$200.978126669464

 

Ethereum - How Smart Contracts Started the Gold Rush of 21st Century

 

• Area to disrupt: Smart Contracts, Building DApps

• Competition: EOS, Cardano, NEO

• Founded by: Vitalik Buterin, who conceived the idea for Ethereum;
co-founders: Mihai Alisie, Anthony Di Iorio, Charles Hoskinson, Gavin Wood, Joseph Lubin

• Based in: ---

• Max supply: ---

ethereum-logo-internal

Ethereum Price - 15 000% Gains for 1 Year

Ethereum has its own native token called Ether (ETH). Unlike Bitcoin, the total planned supply of Ether is not capped. The total supply of ETH and its inflation rate were determined in 2014 during Ethereum’s presale. The presale lasted for 42 days – from July 22 till September 2 and for 1 BTC a contributor received 2000 ETH during the first two weeks.

 

Then, the price of Ether per Bitcoin linearly declined to a final rate of 1337 and stayed flat for the last six days. Back in July 2014, the price of 1 BTC was around USD 600, which means that during the presale, 1 ETH cost about USD 0.3.

There was no fixed amount of ETH to be sold. After the presale was over, another 19.8% of additional Ether was created and given 50/50 to early contributors to the project and the Ethereum Foundation.

A total of 60 million ETH were created for contributors during the sale and another 12 million as a development fund.

Ethereum does not have a total supply but has a capped annual issuance equal to 18 million ETH. This means relative inflation decreases every year.

ethereum-internal-1a

 

Ethereum’s live blockchain was launched on July 30, 2015, and a week later, ETH came out on the exchanges, trading at around USD 2.80. Since its initial launch, ETH price saw a decline and until the end of 2015, Ethereum was changing hands for less than USD 1 most of the time.

During 2016, the majority of people who were interested in Ethereum were tech coders because of the smart contract functionality and the potential for building decentralized applications (DApps) on the platform.

As regards to the price of ETH, it went from USD 1 in January to USD 18 in June 2016, but eventually, at the end of 2016, it fell back to USD 8.

 

Ethereum price chart

2017 was definitely the year of ICOs and therefore – of Ethereum. In March, ETH began to gain more and more popularity because of the Enterprise Ethereum Alliance (EEA) and all the big companies that were joining the Alliance.

Companies involved in the launch included global majors like JPMorgan, Microsoft and Intel. This was adding growing legitimacy to the cryptocurrency and the price began to surge.

During the following months, the ICO craze started and dozens of projects were raising millions of dollars every single day by launching their projects on the Ethereum network. In June 2017, everybody in the crypto world was talking about “The Flippening” after Ethereum’s market dominance raised to 32%, just 6.5% less than Bitcoin.

 

However, the gap became larger just a couple of days later, after ETH price entered a bearish trend, dipping to USD 140 in mid-July.

ETH Price Spike

The next huge spike for Ethereum started in mid-November and in just two months ETH price surged from USD 315 to USD 1424 on January 14, 2018. On January 14, 2017 Ethereum was changing hands at USD 9.50, which means that it gained around 15 000% for one year.

Halfway through 2018, this is still the all-time high.

 

 

Ethereum - a Second-generation Cryptocurrency

Bitcoin is the first generation cryptocurrency where John can send digital money directly to Mary. The second generation came with Ethereum where not only can John send money to Mary, but he can put conditions – “You will receive the payment if you write an article about Bitcoin and Ethereum first”.

Ethereum is an open-source, public, blockchain-based distributed platform featuring smart contract functionality. Because of the smart contracts, we can say that Ethereum is a more advanced system than Bitcoin.

If Bitcoin is a geopolitically secure currency, Ethereum is a geopolitically secure computer that can secure financial instruments. They have launched themselves on different paths and these paths do not cross.

If Bitcoin is a lion, Ethereum is a shark. You can’t say which is better because they serve a different purpose.

 

The face of Ethereum and its co-founder is Vitalik Buterin, a Russian-Canadian programmer and writer, who conceived the idea of Ethereum. In late 2013, teenage Buterin introduced the idea about Ethereum in a white paper. His vision was to build a "decentralised mining network and software development platform rolled into one".

Buterin decided to develop a new platform with a more general scripting language after failing to attract enough supporters behind the idea that Bitcoin needs such a language for application development.

 

Ethereum & Ether

It is important to differentiate the Ethereum platform and Ether – its native cryptocurrency.

Ether is a fundamental cryptocurrency for the operation of Ethereum, which thereby provides a public distributed ledger for transactions. It is used to pay for Gas, a unit of computation used in transactions and other state transitions.

Essentially, Ether is used to cover for the cost of transactions on the Ethereum network, while the transactions themselves are not priced in Ether – but priced in Gas… but Gas can only be purchased with Ether.

Gas can’t be purchased without Ether, and yet transactions on the Ethereum platform can’t be paid with Ether directly.

The rationale behind this set-up is derived from the cryptocurrency volatility, for if Ether is traded on exchanges – the market decides its value, while Gas is not meant to be volatile at all, as it is meant to cover the actual cost of operation of the network itself.

 

 

The DAO Incident

It is impossible to describe the Ethereum platform without reviewing the incident which leads to the major chain split of Ethereum.

The DAO was a digital decentralized autonomous organization and a form of investor-directed venture capital fund. It set the record for the largest crowdfunding campaign in history, raising USD 150 million in May 2016.

 

In June 2016, users exploited a vulnerability in Ethereum smart contracts and stole one-third of The DAO's funds to a subsidiary account.

The Ethereum community was split whether to reverse the maleficent transactions or not.

Ultimately, a consensus could not be reached, hence a hard fork was performed, which lead to the creation of a brand new chain, where the funds had been returned to their rightful owners – the current Ethereum blockchain.

Ethereum and Ethereum Classic logos

At the same time, the old chain, where the funds had been stolen, remained in existence – but now under the name Ethereum Classic (ETC).

As a hard fork was performed, users who owned Ethereum tokens before the fork, received an additional equivalent number of Ethereum Classic tokens after the fork.

 

 

Ethereum’s Switch from PoW to PoS

Ethereum brought programing language and smart contracts to a blockchain.

Smart contracts are the biggest technological difference between Bitcoin and Ethereum. The use of smart contracts allows their users to transfer information based on the outcome of events - without the need of middlemen.

Smart contracts have almost limitless applications. A testimony for that are the thousands of new applications emerging on the Ethereum platform. Whenever there is a need for trust or a need of a middleman – there is a potential application for a smart contract.

 

However, the Ethereum blockchain has its own limitations.

mining-ethereum

Presently, Ethereum’s consensus mechanism is similar to what Bitcoin uses. Both protocols use Proof-of-Work (PoW).

Currently, the time of the Bitcoin block is 10 minutes, the reward for the block is 12.5 BTC, while the time of the Ethereum block is 15 seconds and the reward is 3 ETH. The Bitcoin network can handle 3-7 transactions per second, Ethereum can handle 7 to 15.

Another important difference is that Ethereum’s algorithm favors GPU chips and it is described as ASIC resistant. Mining Bitcoin became almost impossible for the average user due to expensive ASIC miners that are not that accessible for the general public.

Ethereum reinvigorated the GPU mining sector, allowing hobby miners to employ their PCs and GPUs to mine Ethereum without the threat of mass-produced ASIC miners denting their profits.

 

However, mining will no longer be used when Ethereum enters the last phase of its network development, called Serenity. Serenity’s goal is to switch from Proof-of Work to Proof-of-Stake (PoS) by using a method called Casper.

This will make the Ethereum network a lot more cost-effective, block creation will be way faster and also will make the blockchain scalable by introducing the concept of “sharding”.

With the sharding method, the Ethereum ecosystem is supposed to handle one million transactions per second, creating a reliable infrastructure for micropayments.

 

 

Ethereum Started a Gold Rush of the 21st Century

The rising popularity of Ethereum and ICOs triggered a ‘blockhain craze’. A gold rush in a way. Everybody is obsessed with decentralization for one main reason – it is profitable.

The sharks are circling around because there is money in the water. Investors are looking for projects that can make them 100x gains. Greedy businesses take advantage of people who are investing in things they don’t understand.

The technology may be still in its infancy, but the revolution has begun and smart contracts are here to stay.

The question is – whether Ethereum will remain on the forefront of smart contracts application and adoption… or it will be surpassed by the emerging competition of other blockchains like NEO, ICON or EOS.

From an investment point of view – we believe Ethereum has a place in any portfolio, right now it is still the leading blockchain for smart contracts with an overwhelming share of all applications. Furthermore, it has by far the biggest community of smart contract developers and investors – hence it may have the best chance to remain at the helm of the smart contract revolution – which promises to disturb trillion dollar industries.

 

Review: Lyubo Zhechev
(The views and opinions expressed by the contributor in this text should not be considered financial advice, neither treated as expression of Coins.Online’s view.
Cryptocurrency trading and investing is risky and market participants are advised to always conduct a thorough research.)

 

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