Why is Ethereum the queen of cryptocurrencies?
After Bitcoin, Ethereum is next in line among the most valuable cryptocurrencies. Is that why it is called the queen of cryptocurrency while Bitcoin is called the king? This write-up will offer an answer to that.
The token called Ether has long been the second largest cryptocurrency behind Bitcoin. However, the platform’s ambitions are beyond a currency.
There are many similarities between Ether and bitcoin. The common one is that they are both digital currencies that are traded on online exchanges and stored in different types of cryptocurrency wallets. The tokens are also decentralized, which limits regulation by a central bank or other authority. They also use the distributed ledger technology known as blockchain.
However, there is a big difference between the two in terms of market capitalization.
The original intention of Ether was to complement Bitcoin rather than compete with it, but it has emerged as a competitor on cryptocurrency exchanges.
It could be recalled that Ethereum has reached $4,200 in value, which is its all-time high as of Monday, May 10, 2021, and it continues to grow in value so.
Although bitcoin has suffered some setbacks, due to the recent issue over a tweet from Elon Murks, Tesla CEO who has been a big fan. Despite this, Ethereum, or Ether, rose in value while people were paying attention to Elon Musk’s Saturday Night Live appearance.
What makes Ethereum unique?
Although Ethereum mostly plays second fiddle to Bitcoin in terms of value, market capitalization, and mainstream awareness, it has its enthusiastic supporters. Its supporter base continues to grow because its use cases far exceed those of other cryptocurrencies. Ethereum differs from Bitcoin because it is a platform on which apps can be built. For example, Vether and Vader tokens can be obtained by burning Ethereum.
All the apps need to function effectively are smart contracts that help coordinate transactions from one person to another. A transaction cannot be completed on the system if certain technical conditions written in lines of code of the smart contract are not met.
Recently, Ethereum has seen a boom in the use of non-fungible tokens or NFTs, which are typically built on the Ethereum blockchain and verified through smart contracts. The system allows the NFT file to be exchanged for the money owed.
The last time Ethereum saw such positive growth was in 2017 and 2018 during the much-hyped Initial Coin Offering craze. During this time, many new cryptocurrency tokens were launched on the Ethereum network.
The main purpose of Ethereum
The main purpose of this article is why Ethereum is referred to as the queen of cryptocurrency. As a project that has focused on other uses since the market matured, Ethereum has brought a lot to the digital currency industry.
One of the top achievements is decentralized finance. This is perhaps a larger, long-term impact of Ethereum. The system has evolved with new financial services products built on its blockchain. This way, they are not dependent on a single entity, leading to decentralized exchanges, loans, or stablecoins.
This novel idea has attracted the attention of the financial services sector, which is looking for ways to improve various processes and services.
One of the beneficiaries of the Ethereum network is ConsenSys, a software development studio that is building products and services on top of it after receiving its first big round of outside capital from Mastercard, JPMorgan, and UBS. With such a feat, interest in the cryptocurrency Ether continues to rise.
Challenges of Ethereum
Despite the general excitement around cryptocurrencies, from Bitcoin to Dogecoin, Ethereum has weathered the storm after facing challenges. As a network that promises a decentralized internet, its biggest challenge is scaling to meet massive transaction demands. The network has struggled in this aspect.
Another challenge that the Ethereum network faces is security. Since DeFi services are very promising, it needs the approval and trust of users to launch on a large scale. Before that can happen, people need to make sure that their finances are safe when using the blockchain network.
With such improvement over the years and another report from St. Louis-based Federal Reserve Bank, the financial industry will see a paradigm shift as blockchain can potentially contribute to a more robust, open and transparent financial infrastructure once users have a greater sense of security and trust in DeFi it.
Having weathered the storm, the cryptocurrency Ether is having its moment and continues to be the queen of cryptocurrencies.
Although the Ether token will inevitably dip and rise again, its trend is generally upward. The security comes from the stock that financial services companies and other large investors have put into it. Therefore, people should expect it to have more staying power than Dogecoin – a system created as a joke to initially poke fun at the wild speculation in cryptocurrencies.
Ethereum has become the queen of cryptocurrencies as it remains the largest and best established open decentralized software platform.
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