The latest currency to find itself in the spotlight, Ethereum has long been forecast by those in the crypto world to eventually surpass Bitcoin.
While the king may take some toppling, Ethereum has several advantages over its more limited rival.
For example, Ethereum is preferred by certain developers because it allows more flexibility in what the technology can do, while Bitcoin exists solely as a method of exchange.
Unlike dogecoin – which is dismissed by many as simply growing on the back of its meme value and Elon Musk’s tweets – Ethereum is a serious player, in its own right.
What is Ethereum and how does it work?
Ethereum was founded in 2013 by programmer Vitalik Buterin, and several other crypto engineers.
It was set up as a rival to Bitcoin, but designed to be much more flexible for users, and hence have more growth potential in the long-run.
Both Bitcoin and Ethereum use blockchain technology to exchange decentralised money – i.e. one that isn’t beholden to any financial institution – but the latter differs by allowing developers to build their own code on the platform, essentially allowing for more modification.
Etherium’s currency is called ‘Ether’ and uses the symbol ETH.
Like Bitcoin, Ethereum coins are also mined from the blockchain, with some worrying about the potential carbon cost of this activity.
What is one Ethereum coin worth?
One Ethereum coin is worth about $3,000 (or £2,100) but the price fluctuates wildly, often.
Compared to one Bitcoin, which is currently worth around $40,000 (£28,200), Ethereum is obviously much less valuable.
However, both cryptocurrencies have seen massive gains in the past year.
Bitcoin started May 2020 at around $10,000 (£7,000) per coin, and is now four times higher.
Ethereum, meanwhile, was worth around $200 (£140) at the same time last year, which is why many experts believe it has greater growth potential than its older rival.
How is Ethereum different from Bitcoin?
Ethereum and Bitcoin both are based on the same technology, but the latter is much more rigid than its younger rival.
Unlike Bitcoin, for which the market cap is set at 21 million coins, Ethereum is yet to set a hard limit for the amount of Ether in the market.
Ethereum’s creators are also known, primarily Vitalik Buterin, while Bitcoin’s creator is known only as “Satoshi Nakamoto”, and has never been formally identified.
Investing in cryptocurrencies isn’t for the fainthearted, but there are gains to be made if you’re willing to forgo your initial investment.
