Understanding Ethereum

Ethereum is an open-source, blockchain-based platform which allows developers to create and run apps and execute smart contracts on its network. Moreover, Ethereum has its own cryptocurrency (ETH) - often also called ‘Ethereum’. Ethereum is popular as a platform for development, as a cryptocurrency investment - as well as a platform used by ICOs to host their currency on before migrating to their own blockchain. It is a multipurpose platform which has stood the test of time and continues to impress the markets with every passing day.

Ethereum Price History: An Analysis of Ethereum Price Over The Years

Ethereum Price has had several ups and downs over the years. While it has been considered to be a ‘stable’ coin when compared to other names in the markets, Ethereum’s growth has been rapid, especially in the recent times. However, nothing is permanent in the cryptocurrency markets and the price of Ethereum too has gone through a number of fluctuations. Here’s an analysis of Ethereum price history:

The Origin of Ethereum

Before jumping into the Ethereum price history, let us take a quick look at how it all started off for Ethereum. Ethereum was conceptualized in a white paper by Vitalik Buterin in 2013. Buterin, who was involved with Bitcoin Magazine back in 2011, always envisioned that blockchain as a platform was much bigger than cryptocurrencies as a concept. While Bitcoin’s fundamental operations were all economic and financial - the blockchain platform could do much more - with this vision in mind, a crowdfunding campaign was launched where Ether was sold to the participants.

The team managed to raise over $18 Million and Ethereum was officially launched in 2015. While the initial run was smooth, Ethereum faced a number of challenges over the first year. In 2016, a major hack resulted in $50 Million worth of Ether being stolen. This led to a dissent within the Ethereum community and it forked into Ethereum (ETH) and Ethereum Classic (ETC). The original Ethereum platform continued under the new name of Ethereum Classic.

However, it must be noted that Ethereum, the platform is different from ETH (Ether/Ethereum) the cryptocurrency. Over the course of this article, when we say ‘the price of Ethereum’, it refers to the price of the ETH cryptocurrency.

What was the price of Ethereum in 2015?

Ethereum got listed on major cryptocurrency exchanges on the 7th/8th of August 2015. The currency started trading at close to $2 - and crossed $3 for a brief moment. However, Ethereum price flatlined after that and didn’t cross $2 for the rest of the year. The currency closed the year at $0.9. This was the initial year for Ethereum and hence the prices remained quite slow, akin to how Bitcoin prices were in its early years.

What was the price of Ethereum in 2016?

In 2016, Ethereum’s price rose from $0.9 at the beginning of the year to an all-time high of $20.5 in mid-June. However, a hack worth $50 Million resulted in the price collapsing - and eventually it hit a low of $8 to close the year. 2016 was the year ETH and ETC forked. Since then, Ethereum (ETH) entered a major growth rally while Ethereum Classic never attained that level of popularity.

What was the price of Ethereum in 2017?

2017 was a landmark year for Ethereum as the currency witnessed a major surge in popularity over the course of the year. Ethereum started the year at $8 and reached an all-time high of $840 while closing the year beyond $740 later in December. Ethereum’s growth continued in early 2018 when the currency hit an all-time high of $1,360 in early 2018. 2017 was a great year for the entire cryptocurrency markets and Ethereum was one of the biggest beneficiaries in the crypto-boom.

Factors That Determine the Price of Ethereum

When you compare it with other major names in the market, Ethereum is a very young platform. However, despite the limited number of years - it has managed to impress millions of users from around the world who are investing in the platform and millions of others who are using technologies built on the Ethereum blockchain. Let us now take a look at the different factors that affect the price of Ethereum:

The most basic of the factors which affect the price of Ethereum is the demand and supply, which is pretty much the same for every cryptocurrency. Ethereum’s price depends on the demand for the currency. The more the number of people who invest in ETH, the higher its price would be. Once people begin to sell ETH in larger numbers, Ethereum price would come crashing down.

One major difference between how supply affects Bitcoins and Ethereum is that while Bitcoins are capped at 21 Million - and there will be no more Bitcoins ever created, Ethereum does not have any such limit as of now. The currency’s existing supply as of this writing is around 100 Million ETH in circulation. However, there has been an active talk in the Ethereum community about introducing a hard cap for Ethereum’s supply - a hard cap of 120 Million and 144 Million ETH has been proposed but it is yet to be finalized. Hence, the supply factor affects the price of Ethereum price to a lesser extent than it does the price of Bitcoins.

Moreover, unlike Bitcoins, Ethereum was considered to be ASIC-proof so far - this means that it was not possible to mine for ETH using ASIC devices. This is all set to change in the near future as Bitmain has created an Ethereum miner which makes it possible to mine Ethereum using ASIC devices. A fork has been proposed which would raise the hard-cap as well as make Ethereum mining-proof again.

Why is Ethereum Rising in Popularity?

• The choice for ICOs: Another reason why the price, as well as market capitalization of Ethereum, are performing well is because Ethereum is the platform of choice for many upcoming ICOs. There are so many cryptocurrencies (including some major names) which exist as ERC-20 tokens on the Ethereum blockchain. A number of new ICOs prefer to base their cryptocurrencies on the Ethereum blockchain rather than developing their own blockchain early on.

• Multiple Applications: One of the biggest reasons for the popularity of Ethereum is the fact that it is a platform which has multiple applications. Unlike Bitcoin, Litecoin and other major names - Ethereum is more than just a financial platform. While it offers finance as one of its features, it focuses on being a platform for decentralized applications and executing smart contracts. This makes it more versatile and hence attracts a number of developers towards it.

• Enthusiastic Developers: Talking of developers, Ethereum’s blockchain-based platform is an interesting opportunity for developers to experiment with new technology. Smart contracts and decentralized apps are changing the world of technology as we know it - and Ethereum is at the forefront of this blockchain revolution.

Can Ethereum Overtake Bitcoin? (aka ‘The Flippening’)

For years, there has been a belief that Ethereum would someday overtake Bitcoin in terms of popularity as well as the market capitalization. Ever since it was first created, Bitcoin has enjoyed a lion’s share of the market cap in the cryptocurrency markets - forming a major chunk of it. However, Ethereum, which is ranked second - is expected to overtake Bitcoin’s market cap one day, in an event which has been termed ‘the flippening’ by Ethereum investors and supporters. We cant predict Ethereum price.

The idea behind ‘the flippening’ is that while Bitcoin’s application is pretty much focused on finance, Ethereum has a much broader utility. As more and more applications and smart contracts start being employed on the Ethereum network, it will bring more investments into the platform - thereby catapulting it over Bitcoin. While there is still a significant difference between the market cap of Bitcoin and Ethereum, the believers of ‘the flippening’ are convinced that it will eventually happen!