For many blockchain enthusiasts, the rise of Ether ETHUSD is a significant development that is driven by the growing importance of the world’s 2nd-largest crypto behind Bitcoin BTCUSD.
Monday, Ether was changing hands at $4,140.95 on CoinDesk, up 5.7, with that climb bringing its YTD gain to nearly 460%. Ether traded at all-time high at $4,213.46 Monday.
By comparison, Bitcoin was flat on the day at $57,444.65, and up more than 97% so far in Y 2021.
Here is what investors need to know about the digital asset and its rise, as follows:
Ether is the coin, launched in Y 2015 by a team including Vitarik Buterin, Charles Hoskinson, and Gavin Wood, that has come to be known for the ease by which software developers can write bespoke programs atop its network. Sometimes these applications are referred to as smart contracts.
Ether is similar to Bitcoin inasmuch as it is a digital asset that is decentralized, i.e., no one party controls it, and uses distributed-ledger technology known as blockchain that records transactions immutably. The blockchain network is supported by a digital-mining community.
Miners are the record-keepers on blockchains like Bitcoin and Ether and they are rewarded with coins for their efforts.
Bitcoin’s major selling point has been its claim as a store of value and as a currency to a lesser extent, but Ethereum’s network is viewed by many as a powerful, open-source, decentralized backbone off which a number of applications can be based.
Ether values have been supported by growing appetite for NFT’s (nonfungible tokens), and other bits of the nascent digital cryptocurrency market supported on the Ethereum blockchain.
Plus, momentum is building around DeFi, decentralized finance projects, which are also supported on the Ethereum network.
DeFi are applications and services that can facilitate borrowing, lending and trading crypto assets without an intermediary. It is seen as a possible threat to traditional financial markets, or as an application that could be more readily used to enhance buying, selling and lending on Wall Street.
A research report published by the Federal Reserve Bank of St. Louis’s on its website recently said that DeFi has some issues with security, but if addressed could shake up the financial industry.
So, as these issues are solved, DeFi will likely lead to a paradigm shift in the financial industry and potentially contribute toward a stronger, open, and transparent financial infrastructure.
There is no wonder why institutions are excited about the technology, as ETH uses blockchain not only for payments but also for storing computer code which can have many real-world applications.
Have a healthy day, Keep the Faith!