Cryptocurrencies have become popular. The use of the currencies has grown exponentially over the years, and this led to the success of the Bitcoin. As many people are finding the use of the cryptocurrencies, investors have seen the potential of this new field. It is the reason you are seeing different competitors to the Bitcoin coming up.
One of the competitors to the Bitcoin is Ethereum. Ethereum is a computing network operating internationally and works according to the rules set by the Ethereum software. The rules enable the programming of the networks to direct them to complete various types of tasks. There are many computers connected to their network and ensure accuracy the computers work on the tasks in parallel to ensure a correct completion of the respective job. These tasks that these computers execute involve money.
The money operated by the Ethereum network is known as Ether. You cannot use the network for free. On the network, users use Ether to pay the computers on the network for the tasks that they want them to complete. The reason why Ether is becoming a rival to the Bitcoin is the speculation by the holders that it will gain value astronomically over the coming years, just as it happened with the Bitcoin. The truth lies in the ability of the network attracting potential users. In case it does, the value of Ether will go up. It is because the increased number of clients will need the Ether to pay to use the network’s resources. After that, the supply and demand will play its magic. The increased demand of the Ether will increase its value.
The founder of Ethereum, Vitalik Buterin, compares the structure to an international smartphone that can operate according to the apps installed. He refers the application running on the networks as Dapps. It is an acronym from decentralized applications. It is because the apps run on a network of computers that are decentralized.
You may wonder why one would want to use the network. For example, two firms want to settle a stock option, but neither trusts the other to run the operation on its computers. They will contact a third party such as the Ethereum to run the operation on its computers and pay the fees. Ether has potential, and it is another cryptocurrency to watch.