How Ethereum Managed to Gain Traction and Credibility

By Daniel Zo Ethereum

During the last couple of months, digital currencies of all kinds have been growing exponentially in terms of their value. This represents a trend that hasn’t only affected bitcoin and Ethereum, but other altcoins as well, thus showcasing that digital currencies are indeed the future of the financial market.

However, volatility on the market is still present as currencies struggle to find their true value. This has led to both some sharp increases, but also decreases in terms of their price. Perhaps one of the most amazing growths in terms of value was covered by Ethereum, which holds the second highest market cap, as it managed to grow from around $7 in the beginning of this year, to over $400 in June 2017.

Based on this aspect, Ethereum has managed to entertain a 5400% increase in terms of its values in only six months, so this begs the question: What is the fuel of this massive growth?

Ethereum

For those who do not know, Ethereum represents a decentralized platform that allows developers to build a wide variety of apps that are powered by smart contracts. These are basically programmable codes which execute themselves, without needing an intermediary. Once an application like this is released on the market, those who wish to use it can pay a pre-set amount of ether, and get the application running. While the main purpose behind Ethereum is definitely different when compared to that of Bitcoin, it can still be regarded to, and used as a digital currency to make transactions for goods and services. Regardless of this, here are some of the main reasons behind Ethereum’s massive growth:

The increasing popularity of Initial Coin Offerings (ICOs)
Upon releasing an application, Ethereum developers can go ahead and issue tokens, which allows them to raise large amounts of money needed to get their apps running and ready for the market. In short periods of times, great apps can raise a few millions dollars, so this is definitely a boost in terms of popularity for Ethereum, as lots of funds are being invested.

Conflicts going on in the bitcoin market
For years, there have been numerous debates referring to what the right solution for bitcoin’s scalability issue is. The rising number of transactions on a daily basis and the lack of change has led to slower transactions and higher fees.

The backing of big companies
Numerous corporations and businesses have backed the Ethereum project, with Intel, Microsoft and J.P. Morgan being just a few. In return, this helps grow the credibility behind the platform, alongside with its long-term potential on the market.

Constant updates on the protocol
Ethereum has been widely-praised for being able to constantly improve the platform and the network that all the decentralized applications run on. Once an issue is encountered, it usually takes a few days before it is fixed, and things can return to normal.

Based on everything that has been outlined so far, what are your thoughts on the increasing popularity of Ethereum? Let us know in the comment section below.