Ever since the Ethereum platform launched in July 2015, its currency – also called Ethereum, or Ether – has been hugely popular among investors, because of its impressive transaction speed and widespread adoption.
It did not take long for the cryptocurrency of blockchain-based decentralized development platform, co-founded by Russian-Canadian Vitalik Buterin to be established as the second-biggest in terms of market capitalization. Ethereum sits behind only Bitcoin, the founding crypto that was launched in 2009.
Mr. Buterin was introduced to Bitcoin at the age of 17, in 2011, by his father. He became fascinated by the concept, and co-founded and wrote for Bitcoin Magazine.
In 2013 the teenager traveled to Israel and worked with global investing and trading platform eToro to develop Coloured Coins, an open-source banking infrastructure for the future of digital money. It was during this trip that the youngster realized that programming language could deliver extraordinary functionality to the blockchain beyond mere currency transactions.
In November 2013, Mr. Buterin published the Ethereum White Paper that set out his desire to create a platform on which decentralized applications could be built. It was the most exciting development in the cryptocurrency world since the mysterious (and yet to be unmasked) Satoshi Nakamoto introduced Bitcoin. Ethereum, or the ‘Ethereum Virtual Machine’, was built as a decentralized computer network on top of which software developers could program any platform, and the network is fuelled by Ether (or ETH).
The Ethereum project managed to raise almost $20 million in July and August 2014, and when Ether was introduced, in July 2015, it was valued at $2.8 per token. By March of the following year it had hit $10, and as transactions on the Ethereum blockchain skyrocketed a raft of top organizations begin backing the crypto. The United Nations, Toyota, Deloitte, Samsung, and many others sought to take advantage of its enormously powerful shared global infrastructure. Before long its price reached $300, and Ether’s value peaked at $1,315 in January 2018.
There are many similarities between Ether and Bitcoin. First, they are both blockchain-based cryptocurrencies and can be mined by users around the world. There are some key differences, however. While the annual supply of Ether is limited to 18 million, Ethereum could theoretically continue to introduce fresh currency and make its supply unlimited. Conversely, Bitcoin’s supply is capped at 21 million – that mark is due to be reached in the year 2140.
Another big difference is the processing speed; Bitcoin transactions take around 10 minutes, whereas an Ether transaction takes only 15 seconds.
While Olaf Carlson-Wee, Founder and CEO of Polychain Capital, has predicted that “Ethereum’s price could surpass that of Bitcoin by the end of 2018” and Monkey Capital’s Daniel Mark Harrison reckons it will “likely be valued at over $100,000 by 2042” others are more cautious. Luis Cuende, co-founder of Ethereum-powered company Aragon, says: “Ethereum’s price will hit $1,000 by mid-2019.”