Factors influencing the price of Ethereum
Key to Ethereum’s long-term valuation is the utility, ease-of-use, speed and cost efficiency for managing smart contract transactions. A battlefront shared by a number of blockchain solutions.
Just like Bitcoin and XRP, Ether’s price at a given time hinges on several factors, including:
Regulations around the Ethereum platform or use of crypto in general.
Competition from other smart contract networks such as the Flare Network (related to Ripple XRP).
Crimes, hacks or scandals.
What makes Ethereum unique?
Ethereum was the first blockchain solution to enable smart contracts — programmable contracts designed to execute when specific predetermined terms and conditions are met. These contracts eliminate the need for intermediates between contractors and help reduce transaction costs.
Ethereum Network Use Cases & Fees
The main applications for Ethereum smart contracts include DeFi, ICO’s and Stablcoins:
Decentralized finance (DeFi) where the Ethereum blockchain is used as an intermediary for automated and cost efficient transactions.
Initial Coin Offering that involves crowdfunding via the sale of tokens.
Stablecoins which are fiat pegged virtual currencies such as USDT , USDC, PAX and BUSD.
Ethereum network transactions work via small transaction costs known as ‘gas fees’. In technical terms, gas is the unit of measure on the computational effort required to complete a transaction or execute a smart contract. Generally, complex operations require more gas to complete.
In the words of Gavin Wood, the blockchain was built to serve as “one global computer for the entire planet.”
Ethereum Market Capitalization
5 years following its launch, ETH had a $75 Billion total market cap, giving it the second highest marketcap of any cryptocurrency at the time. To arrive at the current price of ETH, total market cap is divided by the total supply of ether available.
As of August 2020, Ether had a circulating supply of 112 million coins. 72 million of these were obtained from the first-ever (genesis) block on the ETH blockchain. 60 million of these had been assigned the crowd sale original contributors that funded the project and the rest allocated to the development fund.
The other 50 million coins have been generated as block rewards to ETH miners. Initially, the reward was set at 5 ETH per block but was later decreased to 3 ETH in 2017 before being reduced to 2 ETH last year. On average, an Ethereum block is mined in 15 seconds.
Origins of Ethereum
Vitalik Buterin had the idea of Ethereum in 2013 at age 18, intending to build an open-source platform that would allow for the execution of smart contracts using blockchain. Previously, he was a co-founder and writer for the Bitcoin Magazine news website. He envisioned a platform where users would be able to build decentralized applications on its blockchain. This became the conception of Ethereum.
In the summer of 2014, Buterin and the other seven co-founders secured funding for the Ethereum project he had detailed in a 2013 whitepaper. The other co-founders are Gavin Wood (who coded the first implementation of Ethereum), Joseph Lubin, Anthony Di Iorio, Mihai Alisie, Charles Hoskinson, Jeffrey Wilke, and Amir Chetrit.
Ethereum’s first crypto protocol, called Frontier, was finally launched in July 2015. Charles Hoskinson and Gavin Wood have since moved away from Ethereum to work on other projects. Hoskinson moved to Cardano and Wood moved to Polkadot.
Ethereum (ETH) Price History
The majority of people, mostly novice crypto investors, often use Ethereum to refer to the cryptocurrency, which is technically inaccurate. Ethereum is the platform, and its native digital currency is called Ether – traded as ETH.
Despite the wide fluctuations of ETH’s price, it is considered by many analysts to be a reliable crypto to hold as part of a diversified portfolio due to its wide adoption by developers.
Historical course development
The price of Ether during its launch was less than 1 EUR. It then soared quickly at the beginning of 2016 as the Ethereum founders were preparing to launch a more stable protocol called Homestead. In March, Ether posted a high of 11.6 EUR followed by another high of 12.5 EUR in September.
Exploiting a vulnerability in the DAO’s code, a hacker stole around 50.8 million EUR (60 million USD) in ETH from the platform in June 2016. A disagreement on whether to conduct a hard fork to restore the project to its pre-hack state or not led to the splitting of the Ethereum project into two. This resulted in the creation of a new version of Ethereum called Ethereum Classic alongside the original project Ethereum.
The Ethereum project then suffered a distributed denial-of-service attack in September that year. The situation was, however, quickly rectified by carrying out two hard forks.
ETH’s price started gaining upside momentum at the beginning of 2017 when the crypto was launched in eToro. During the first quarter, it recorded an upswing of over 500%. ETH posted a new high of 250 EUR per Ethereum coin in July . The price decline shortly before kept moving up to 295 EUR in September.
It briefly fell to 250 EUR after China’s ban on ICOs but recovered afterward. By the end of the year, Ether’s price had almost reached 400 EUR. The beginning of 2018 was even more successful, and the crypto posted an all-time high of 1,000 EUR on the second week of January. The price then crashed by almost 80% in the next eight months following the end of the ICO rush.
Partnerships with Samsung and Opera in 2019 , however, helped put the coin back on track and through 2020 Ether gained strong momentum.
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Relationship between Ether and other cryptocurrencies
Information on how Ether relates to other cryptocurrencies is useful when considering which crypto to invest in.
Bitcoin is increasingly seen as a ‘storage of value’ where as Ethereum is pursuing a more functional use for smart contract management. The Ethereum network recently set a two-month record streak of exceeding Bitcoin in terms of transaction fees.
Ripple network has a 100 × higher transaction rate than Ethereum’s. While the latter can manage 15 transactions per second, XRP can handle as many as 1,500 transactions per second.
EOS is arguably the second most popular smart contract blockchain platform after Ethereum. It is new and not as developed as Ethereum. The platform can handle as many as 3,000 transactions per second.
What is the best Ethereum wallet?
Security is the fundamental concern for crypto wallets and Ethereum is no exception. Trusted wallets include Metamask, MyCrypto, and MyEtherWallet — along with our own wallet with the added security of ISO certification for Information Management Systems.
Is Ethereum a good investment?
According to popular analysts, Ethereum is a good investment because of its massive potential for impacting all areas of business transaction and contract management. Risks include limited funds, regulatory conflicts, competitive solutions and speed of innovation. To date, Ethereum remains one of the most respected additions to any cryptocurrency portfolio.
What is the current price and future price prediction for Ethereum?
As of right now, the price of ETH is XX. Based on the Crypto Research Report from June 2020, ETH price is estimated to reach 3,000 EUR anywhere around 2025 and 2030.