Ethereum, the next rival for Bitcoin
Cryptocurrency is not only Bitcoin: when Ether was announced in 2015, it seemed like a very ambitious project. By this time, bitcoin had already established dominance in the cryptocurrency industry, but it had been created with a different purpose that would diverge from bitcoin’s primary use as a cryptocurrency.
Ethereum would build a network, much like bitcoin, which was based on blockchain, but Ethereum would allow other apps to be created on it. The idea being to allow companies to take advantage of blockchain technology and run their own stuff. In return, Ethereum users would earn ether for keeping the network running. After receiving funding, Ethereum users were rewarded with ether, whose value was about $3.
On January 1, bitcoin was trading at the day's high of $1,003.25. On Wednesday, it broke through the $2,300 barrier for the first time to hit a fresh record high of $2,377.32, according to CoinDesk, marking a year-to-date rise of 137 percent.
Meanwhile, bullishness around bitcoin has stoked appetite for other cryptocurrencies. One in particular known as ether is getting traction. Ether has risen from $8.24 on January 1, to a high of $203.30, according to data from Coinmarketcap.com. This represents a 2,367 percent rise year-to-date.
This fantastic run has not been without some hurdles, though, and the Ethereum platform has had some challenges. For example, one of the systems built on Ethereum, DAO, was hacked leading to the near-loss of $53 million. Since its launch to February this year, ether had never peaked above $20, until the March rally.
On the 1st day of March this year, one ether token was trading at $16.05, until the Enterprise Ethereum Alliance (EEA) was formed. The main contributor to EEA is Microsoft. The company offers Microsoft Azure which is a cloud computing platform, and one that can really make use of blockchain.
Other companies that may stand to benefit from the Ethereum platform and became part of EEA included Intel, which could also benefit from a network of computers providing processing power. Since then, many more Fortune 500 companies have joined EEA including Toyota, Credit Suisse Group, UBS, Merck and many others bringing the number close to 100 companies.
Considering that ether is only two years old compared to bitcoin which has more than 8 years’ existence, I’d say it’s very likely ether will be just as successful as bitcoin. Probably even more, but it will take time. Ether value is rising in tandem with bitcoin’s, so it would be ignorant predicting a match in value any time soon.
However, Ethereum has the advantage of not being tied down any particular use like bitcoin has to cryptocurrency. The disadvantage is that there are now other companies mimicking Ethereum like R3, which just secured funding worth over $100 million. As blockchain is open-source, ether should expect some tough competition this year when blockchain became the trend.