Meta: What sets Ethereum apart from its lookalikes and competitors to make the asset unique? Read this article to find out.
Ethereum is one of the world’s most popular cryptocurrencies. It’s fast becoming a household name; only the flagship digital currency Bitcoin enjoys more reputation and recognition.
However, while Bitcoin is more popular than Ethereum, the latter is widely considered to be the more advanced of the two. Let’s take a closer look at what separates the Ethereum network from its lookalikes and how the Ethereum price is being shaped by its global fame.
The History of Ethereum
Ethereum first hit the market in 2015, and few could have anticipated the success the asset would go on to see. Today, Ethereum is the industry’s second-most popular cryptocurrency, beaten only by Bitcoin. It has a market cap of $200.99 billion with over 120 million coins currently in circulation.
Ethereum was designed to rival Bitcoin’s dominance, and it quickly rose through the ranks to become a true contender for the top spot on the charts.
For a number of years, Ethereum and Bitcoin shared a consensus mechanism, the means through which crypto transactions are verified on the network. They both used a system called proof-of-work (PoW) which, while offering a number of benefits, does have some key downsides.
PoW systems require huge amounts of energy to validate transactions. Users must solve complex puzzles which are incredibly energy intensive. Bitcoin, in particular, has come under fire in recent years for its carbon emissions as a result of using a PoW mechanism.
The Ethereum Merge
In September 2022, Ethereum implemented a change that would see it leave the controversial PoW consensus mechanism behind. Called the Ethereum Merge, this was a huge undertaking that had been planned for years, and the entire crypto community was watching intently.
As a result of the Merge, Ethereum switched to a new kind of consensus mechanism called proof-of-stake (PoS). This is a far more efficient system that uses a small selection of validators and significantly reduces energy consumption and carbon emissions.
This event was a key milestone for Ethereum. It created a clear divide between it and Bitcoin, a rival that it had long been compared to. It signified Ethereum’s commitment to moving forward and evolving, developing and refining its technology to better fit in today’s world.
Ethereum has been something of a trendsetter in this regard. Sustainability and environmentally friendly practices are becoming the standard across all industries and sectors, cryptocurrency included. We’re now seeing more and more blockchain platforms move to a PoW mechanism to reduce the impact on our planet.
What Else Differentiates Ethereum?
What else sets Ethereum apart from its lookalikes and competitors? A key factor is the sheer size and scale of the Ethereum network itself. The network is made up of millions of unique nodes, far more than most other cryptocurrencies. This means integration of the technology is smooth and easy.
Ethereum is also more scalable than rival coins, Bitcoin in particular. If cryptocurrencies are to be adopted by huge, mainstream populations, they must be capable of handling significant increases in traffic volume and user activity. As it stands, Ethereum is more capable of doing so than a number of its competitors.
Another factor that differentiates Ethereum is its decentralised app (dApp) capabilities. The Ethereum network isn’t simply a platform through which cryptocurrency transactions can be processed, it can also be used as a platform for the design and implementation of sophisticated tools and applications.
Decentralisation is an increasingly important ethos that is set to shape the future of the internet and digital technology. As we head towards a Web3 world, blockchain networks like Ethereum that can host dApps will rise above the rest.
Finally, Ethereum is capable of hosting and implementing smart contracts. These are self-executing contracts that can be used for a wide array of different purposes. Contracts are integral to the business world, and with smart contracts organisations and individuals can ensure terms are not breached, with all processes fully automated and secured by the cryptography of the blockchain network.
How Has Ethereum Performed in The Market?
As mentioned above, Ethereum is the second most popular cryptocurrency, well ahead of its closest rivals and second only to Bitcoin.
Ethereum is currently valued at a price of $1,675.15. Its value has increased by 5.09% over the past 30 days and by 39.61% since the beginning of the year.
Ethereum’s strong recent performance is due to a number of reasons, but the asset recently hitting revenue of $10 billion has been one of the major contributing factors. This incredible figure puts Ethereum in a league of its own, hitting $10 billion in revenue faster than tech giants like Microsoft and Meta.
The news will have only further encouraged investors who were already confident about Ethereum and have set the asset on a positive run that should see it further establish itself as one of the most important assets in the cryptocurrency industry.
Newcomers to the world of crypto might assume that Ethereum is like any other digital currency. This isn’t the case; the asset is paving the way and serving as a benchmark for other cryptocurrencies to aspire to, with numerous attributes that set it apart from its competitors.