Unless you’ve been living under a rock for the past couple of years, you’ll have heard of Bitcoin and its dramatic recent rise in value. Just this year alone, Bitcoin price has surged from around $1,000 per coin in January to a high of $3,000 in June. Cryptocurrencies have now become mainstream, with investors from all sides jumping in on these hot digital properties.
A comparative newcomer to the cryptocurrency scene is Ethereum, which has also seen a massive surge in value in the last three months. From relative obscurity in March, it has surged over 3000% to reach highs of over $400 per coin in June.
Will Ethereum eclipse Bitcoin as the next big thing in digital currencies?
Ethereum is currently the second most popular cryptocurrency after Bitcoin, although several others have arrived on the scene in 2017. Analysts forecast that market capacity of Ethereum will surpass Bitcoin in 2018. This currently stands at around $23 billion, with Bitcoin at $42 billion.
Differences and similarities
Although both work on independent blockchain technologies, Bitcoin has a finite supply, with a final volume of 21 million coins to be made available by 2140. Ethereum is infinitely mineable, although, as with Bitcoin, subsequent blockchains become exponentially harder to mine due to the mathematical nature of the technologies involved. There is currently a limit of 18 million Ether (the individual tokens making up the cryptocurrency) produced per year.
The primary technological difference between the two is the key here; whereas Bitcoin was developed purely as a digital currency, Ethereum is more of a platform for digital transactions. Ether can power any online technology and be used to trade and develop digital solutions in the future, without the need for governments or central banks.
The mass decentralization of apps and digital platforms, along with the adoption of smart contracts, will result in more companies, organisations and developers getting on-board with Ethereum.
It’s too early to categorically say whether Ethereum will overtake Bitcoin, however if the charts this year are anything to go by, we can expect a lot of price fluctuations. Bitcoin has paved the way for digital currencies, making the market more tolerant to them, so this could well be the beginning of a new age of cryptocurrencies.