Digital currencies seem to have a great potential to eventually replace all our fiat currencies within a couple of years
In the last few years, many new inventions have been introduced to the market, some of which have the potential to revolutionise the world. While facing global challenges such as climate change, technological progress is absolutely required. Besides developing new motors and batteries to find more sustainable sources of energy, one big subject which cannot be ignored is digitalisation. As the age of the internet continues to influence our daily life more and more by allowing us to communicate with each other and organise things within seconds from all over the globe, more and more physical things that have to be produced out of natural resources become unnecessary.
One of the big technological inventions of this century is cryptocurrencies. The digital currencies of which probably everyone has heard already seem to have a great potential of eventually replacing all our fiat currencies within a couple of years making the entire financial market digital. Since Bitcoin, Ethereum and altcoins have entered the market, more and more businesses started to adopt the new coins and use their advantages. Ethereum Casinos have been popping up everywhere on the internet in recent years.
Now it is evident that many people have earned big amounts of money by investing in those digital coins. But what is Ethereum exactly? What has happened since its launch? And why has Ethereum risen so sharply? We have the answers to all your questions!
What is Ethereum?
Like all cryptocurrencies, Ethereum is based on the concept of the blockchain network. A blockchain is a decentralised, distributed public ledger that verifies and records all transactions. That means that it is not a system that is placed at one place at a time but an international network of users that build and distribute the chain to each other.
Everyone on the Ethereum network has an identical copy of this chain, which allows them to observe all previous transactions. That makes the entire system absolutely transparent unlike the current financial system because it is simply decentralised. Decentralised means that the network is not administered or maintained or organised or monitored by any centralised body, but rather by all distributed ledger holders.
To safeguard the network and verify transactions so-called cryptography is used in blockchain, a decoding system that nobody can hack into. The more people use the Ethereum network, the bigger it gets. Of course, this depends not only on holders and investors but also on the general acceptance of digital coins.
How much did Ethereum rise?
Since the introduction of the Ethereum coin and its own blockchain technology, much has happened with the value of the coin. On January 19, the price of the Coin made in Russia which is now the world’s second most valuable cryptocurrency, reached a new all-time high of 1,440 US-Dollars, around 1,050 pounds. This was not the first time that the Russian coin hit a record high. The first record, which is established three years earlier, was beaten again, summing up to a total market value of more than 160 billion US-Dollars.
Of course, the financial crisis of the last two years has impacted the Ethereum network dramatically. But after the all-time low in March 2020 the coin managed to grow fast. Now the value of the coin is almost 10 times what it was one and a half years ago. One must not forget that the cryptocurrency is not even six years old.
It is a very good sign that the coin made it to establish such a strong market network in such a short amount of time. Even the one and only, like they call it, Bitcoin was beaten by the growth of the Russian coin. This tremendous growth in value can be the result of increased money transfer into all of the main cryptocurrencies, which are now seen as reasonably safe stores of value.
Why did Ethereum rise so sharply?
After such a success story many ask the question of how and why the coin was able to recover so fast. There are different reasons for the rise of the coin. One reason is that Ethereum is the second-largest cryptocurrency and, as such, immediately catches the attention of the beginner investor. Financial interest in this big coin tends to follow in the aftermath of bitcoin rallies. But that’s not all of it. There are still other forces at work driving its current uptick.
The first step would be to search for answers to the quality of the invention. Ethereum sees the most activity in the cryptocurrency sector and is based on an extremely modern and complex system that is known to work perfectly. So no wonder that more and more people are convinced by this new technology and start to invest their money and contribute to the growth of the coin.
An update is responsible for the attraction
Another reason for the steep rise of the coin is the new update. The new update Ethereum 2.0 seems to have not only faced several concerns about the current older version but also made it improve major issues. One of those new features of the new update is the reduction of transaction fees. That made the new update a lot more attractive and more people started to use the coin. Furthermore, the digital coins have previously faced concerns over their actual sustainability as the mining process in which the coins are produced requires extremely large amounts of energy, of which most comes from non-sustainable sources such as coal. Governments like China have already started to crack down on the mining plants.
Ethereum aims to eliminate those mining processes and promised to drop the amount of energy required in the upcoming months. This gave even opposers of the new digital coins reason to change their thinking. If the coins can be produced more eco-friendly they have a high potential to replace all fiat currencies, connect the entire world’s financial systems and give new opportunities to future solutions which are required in order to tackle the challenges of the 21st century.
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