How Does the Ether Market Work?

If it is a given that blockchain technology can and will become increasingly prominent in business enterprises, it will be a key expectation for both investment agencies as well as retail traders that market will fast become a new and high functioning class of assets.

The way things are right now, there are a few digital assets with differing values from Bitcoin, which is the oldest, and still thriving cryptocurrency rooted on blockchain.

Bitcoin is highly appealing to both traders who prone to taking substantial financial risks as well as those whose hopes rest on digital currency becoming a staple source of value and a critical player in international trade. Critics of bitcoin will posit its volatile nature as the main obstacle but it is still among the most stable relative to other digital currencies. Its market cap today is well north of $10 billion. But ever since bitcoin officially arrived on the scene circa 2009, several other digital currencies have turned up offering a close value proposition and relatively higher volatility.

Ethereum is a one of those digital currencies that is traded via their platform and is a prime candidate for facilitating a more dynamic portfolio.

Is Ethereum a scam?

No, Ethereum is not a scam. However there are a few scams around Ethereum, including Ethereum Code.
Its success is due in part to that fact that it offers some unique benefits that you cannot expect to get from other digital currencies, not excluding bitcoin. However, that is not saying those benefits come with no strings attached. There are some conditions and risks to consider. So part of your research as a trader keen on trading Ether involves getting to know the platform it uses, Ethereum. And later we shall dwell into other factors that affect price movements for Ether.

Ethereum, What Is It?

In a nutshell, a platform consisting of decentralized activity, founded by one Vitalik Buterin and officially announced in the early days of 2014. Buterin’s well-documented vision was to come up with his own system based on blockchain that would yield a more dynamic array of benefits for prospective traders and international developers. The Launch in beta for Ethereum was not until July of 2015 and the production version only came out in March the following year. The most exciting new feature of the platform was that it would run on Turing-complete smart contracts.

In very simple terms, smart contracts ascertain that as soon as a preset condition is satisfied, the contract clause that corresponds with it would also be satisfied. The Turing-complete feature is valued because it enables developers more options when coming up with the codes. Now, smart contracts are run on the Ethereum blockchain which is a public one. All of its transactions and agreements are recorded in a distributed ledger.

How Does Ether’s Network Work?

Straight away, what is important to know about ether is that is not a intended to be a global digital currency like bitcoin. It is restricted instead for particular actions on Ethereum’s network. Right now, according to howwetrade.com, the market for ether is supported by much of the same infrastructure that has been developed around bitcoin’s network. But ether did not develop the same way bitcoin did.

Bitcoin users started out using desktop computers to process transactions and had to move on to mining equipment to keep up with the ever-expanding network. Ethereum’s story was different.

In 2014, there was a pre-sale for ether tokens which raised over $14 million. Contributors got 60m ether in return. The development fund was boosted by 12m and the remainder went to the non-profit Ethereum foundation based in Switzerland. It all added up to an initial supply of 72m ETH. The official protocol thereafter allowed for the generation of 5 ETH for every mined block. Also, the maximum ETH that allowed to exist on an annual basis was 18m.

The bitcoin supply is arguably more consistent thanks to strict rules that have been coded into the software. Unless they are changed, there will only be a maximum amount of 21 million bitcoins. Consistency is not a given with the ether market.

The Ethereum foundation had announced at launch time that the network would follow a new consensus algorithm this year called the rules of Casper.

Conclusion

There is no doubt that Ethereum and ether have become a sensation in the arena for digital currencies and with new developments not too far away, we can only imagine the exponential rate at which they will continue to grow.

This article has been composed by a guest blogger. Sources, to our knowledge, have not been disclosed so the quality of the information may appear exaggerated.

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