Ethereum was invented in 2013 by Vitalik Buterin as an ambitious project that seeks to apply blockchain technology to more than just money.
By using smart contracts, developers can create and run elaborate systems on the Ethereum network that do much more than move currency from one wallet to another. They have also created entire applications on the Ethereum network.
Ethereum’s native currency, Ether (ETH), is the second- largest cryptocurrency by market capitalization.
Investors recognize the potential of the network, as ETH is up more than 350% since the start of 2021. Most notably, the Ethereum network is not even in its final form, with more features and improvements still in the works, giving potential to this cryptocurrency.
What is ETH?
ETH is the native currency of the Ethereum network. The Ethereum network is a decentralized computer network that is based on blockchain technology .
Chains of blocks ( blockchain ) are public accounting books in which several network users verify all transactions. This means that they cannot be altered or hidden.
Ethereum intends to apply this extreme verification to wider uses than simple money transfer.
The Ethereum network has smart contracts, which are immutable thanks to the fact that the blockchain validates them.
These contracts are executed at all times as designed, without interference from third parties or governments.
This process has allowed developers to create decentralized applications ( dapps ) that run on the network.
In the same way that a computer can run software, Ethereum can run dapps .
To incentivize users to contribute the computing power to validate transactions on the blockchain, Ethereum rewards cryptocurrency miners with Ether (ETH).
Miners receive ETH for successfully validating new blocks on the blockchain, keeping the ledger intact. ETH is also used to pay gas fees, which are fees charged for using the network to send currency or run applications.
ETH market position
At the time of writing, ETH had a market capitalization of over $ 400 billion , making it the second largest cryptocurrency in the world.
Market capitalization represents the price of the token multiplied by the number of tokens in circulation.
When looking at price growth potential, it is important to look at market capitalization relative to other cryptocurrencies to determine the true growth potential of a project. Particularly for ETH, it is important to use the market capitalization of ETH to compare it to Bitcoin (BTC).
The dominance of BTC is at a low level, which means that BTC represents only about 40% of the total value of all cryptocurrencies.
ETH and tokens built on top of the Ethereum network are currently outpacing BTC’s growth rate , a bullish sign, indicating that investors may view the Ethereum network with optimism, beyond BTC.
The bullish case for Standard Chartered
Britain-based banking giant Standard Chartered has set a price target for ETH that is between $ 26,000 and $ 35,000. The firm’s team of financial analysts believe that ETH is more like a financial market, and that it has more use cases than BTC.
However, they point out that for ETH to reach $ 35,000 and overtake BTC as the largest cryptocurrency, BTC would have to trade close to $ 175,000. And they add that ETH is a higher risk investment than BTC, which could nevertheless yield a higher reward.
Van Eck’s bearish case for ETH
Van Eck is a global investment management firm that warns that governments could compete with ETH by creating Central Bank Digital Currencies, backed by government institutions much like fiat money.
Overall, Van Eck remains bullish on ETH, but notes that regulation may be one of the few things that can stop ETH’s momentum.
Where to buy ETH
ETH is a top-tier cryptocurrency that is listed on most major exchanges, such as eToro , Coinbase, and Gemini. From El Planteo, we recommend eToro .
How long will it take for Ethereum to reach $ 10,000?
Ethereum at a price of USD 10,000 is possible in the next few years. ETH remains the dominant platform for blockchain applications . However, the technology is fairly new.
As more and more developers learn to use the Ethereum network in the coming years, more dapps will exist on Ethereum, and more users will be drawn to the network.
Also, major institutions are starting to use Ethereum. Traditionally, governments and institutions tend to be slow to adopt blockchain technology , but the pace of adoption has accelerated in the last year.
As more companies realize Ethereum’s potential, its price will go up.
An ETH at $ 10,000 is likely to require further downsizing of Bitcoin’s dominance. However, Bitcoin is still the best indicator of the health of the cryptocurrency market in general.
In essence, ETH needs BTC and the market to go up in general, but it also needs to eat BTC’s market share.
Lastly, it is important to note the ETH 2.0 package, a major suite of ETH updates that will go live next year.
As ETH spends working on the basis of a protocol proof-of-work (work test) one proof-of-stake , or proof of participation, which is more efficient, several important changes that can occur up the price of Ethereum .
In August 2021, EIP-1559 was approved, which means that some of the transaction fees on the Ethereum network will burn (go out of circulation)
The more the network is used, the more ETH will be burned, and the scarcer it will be.
If ETH is used more in the next few years, this deflationary measure should mean that the price of Ethereum will increase.
The current proof-of-work system greatly increases the selling pressure on ETH. Miners have expenses to pay, and they do so by selling the ETH they mine.
As ETH becomes proof-of-stake and miners are eliminated, this massive dumping of ETH will stop. Also, staking rewards users for holding ETH, so the selling pressure will be further reduced.
The transition to ETH 2.0 should also drastically reduce fees, further increasing network usage and the amount of ETH being removed from circulation.
The rollout of these scalability enhancements appears to be set for 2022.
Where to store Ethereum safely
Best hardware wallet: Ledger
Hardware wallets store your cryptocurrencies offline. The user’s private keys, which are used to authorize transactions, are stored on the Ledger device . This process keeps the keys offline and away from hackers who could access the keys from an online location.
Best Software Portfolio: ZenGo
ZenGo is a mobile application that offers a wallet for storing private keys. In addition to being a wallet, ZenGo allows users to buy cryptocurrencies on the app.
Current cryptocurrency prices
The total cryptocurrency market capitalization stands at just over $ 2 trillion , marking a strong recovery after the early summer slump.
ETH and altcoins continue to wrest market dominance from Bitcoin.
The transition from ETH to proof-of-stake appears to imply a strong future for decentralized finance ( DeFi ) and a long-term growth line.
So is Ethereum a good investment?
If you think smart contracts, DeFi, and dapps are the future, keep ETH in mind as it should continue to be the leader in those categories.
With more institutional engagement and scalability improvements to come, most experts and analysts see a bright future for ETH.