In order for the cryptocurrency market to become a standard, one of the two scenarios must play out. Either one cryptocurrency becomes the ultimate cryptocurrency, ensuring all other iterations or designs are obsolete. In this scenario, many cryptocurrency investors could find themselves disappointed with their investments, unless it is clear in this hypothetical coin’s rise that it will become the preeminent name in the space or, if it is like Bitcoin, where there are already millions invested in the name.
The other scenario is that while one coin rises to become prominent – much like Bitcoin today – there is a plethora of other names used for specific purposes and needs. It is in this scenario where Ether really shines. The reason it has proven to function well under these circumstances is that the company behind the crypto has shown itself to offer real value to businesses. This provides Ethereum with a layer of protection against the normal concerns that face startups, such as not enough demand for the product.
Instead, you have a coin that has become the second-largest name in the space because its use is growing through the improvement of the company. This means that there is a legitimate demand for the coin (even if it remains small) that can help justify the rise it has seen over the past two years, despite the struggles during 2018.
What Makes Ether Unique?
1) Being a corporate darling:
Cryptos do not just benefit from blockchain adoption. There are plenty of companies, like Walmart, that have built internal blockchains to help them track movements of supplies. They do not require a cryptocurrency to use this sort of blockchain.
Instead, for cryptos to flourish, blockchain’s adoption would also require the use of the blockchain’s crypto that the companies have developed. It means actual financial transactions are required on the blockchain to make it worthwhile, from an investor’s perspective. And the larger the transactions, the stronger the crypto will become.
That is the sweet spot that Ethereum currently enjoys. It has become the blockchain for business-to-business transactions, which creates a layer of security when evaluating the safety of the coin. As long as businesses see the need for the platform, they will continue to use it. And the stronger the businesses that enter the platform, the more reliable those transactions and rates will become.
All of this will help the value of Ether since it would see incremental increases in its transaction rate as the price rises. That is allowing for a legitimate upward movement in demand, which creates a reliable price increase.
Despite Ether’s early popularity, it has not reached that level of reliability. When companies like Microsoft and JP Morgan see the use for the blockchain, though, it is a positive sign that they also see potential in the currency used to transact on that chain.
2) Ease of mining blocks:
Unlike Bitcoin, new Ether blocks do not have nearly the hurdle to mine new coins, mainly to encourage miners to validate the contracts that take place on the blockchain more quickly. Each of Ethereum’s blocks holds five Ethers and a set of blocks is expected to be uncovered every nineteen seconds. For Bitcoin, that rate is every ten minutes. This allows for speedier transactions and improves the buying and selling of ethers. It also reduces the fees for those buying and selling coins since there is no need to pay up to have a quick result.
To sum up, Ether’s business-use potential and ease of mining blocks mean that the coin is here to stay. If you are interested in investing in Ether or any other digital currencies, please feel free to visit bitiq.org.