Price of Ethereum History

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Price of Ethereum History
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Ethereum is the second largest Cryptocurrency after Bitcoin, and it has had a price growth that has at times overshadowed bitcoin. Ethereum is also the most active blockchain among cryptocurrencies, largely due to the growing popularity of decentralized applications.

Ethereum’s Historical rate 

The price of Ethereum the second largest Cryptocurrency took much of the attention away from Bitcoin. When it surged more than 325% to reach its preliminary all-time high in May 2021. Even after the correction that followed, the price of Ethereum remains well above its previous rate.

The latest big price increase comes as a result of ever-increasing activity, with many new projects on the Ethereum blockchain both within NFTs and Defi projects. In addition, the recent peak was likely fueled by the general optimism in the market which also saw the bitcoin price go to the next $75,000 high.

2017 – CryptoKitties

The recovery came from an unexpected quarter. In late 2017, a decentralized app called CryptoKitties was introduced. This was the first time NFTs were used on a large scale. KeyptoKitties became so popular that the app at most ended up taking up as much as 11% of the system resources of the Ethereum network.

Genesis-mining

The increased use of the Ethereum blockchain led to a lot of activity on EVM, which led to high demand for Ethereum GAS. The demand for Ether also increased drastically, and Ethereum experienced prices of almost $1500.

2016 – The DAO Hacking and Ethereum Classic

A major test for Ethereum occurred in 2016 when a smart contract in The DAO was hacked, and values ​​worth around $50 million were stolen. The hacking happened due to bad programming on The DAO’s part, and the problem had nothing to do with Ethereum directly. But Ethereum’s price was still greatly damaged by the incident. The price of Ethereum fell from around $20 to around $13 almost overnight.

Vitalik Buterin and a majority of users decided to introduce a controversial fork to reverse the hack. This led to a smaller group continuing to mine the old blockchain on 20 July 2016. This version of the Ethereum blockchain is now known as Ethereum Classic (ETC). Naturally, this was not good for the Ethereum price either.

What affects the Ethereum Price?

Future Ethereum Price Development 

Important factors for Ethereum course development include Ethereum mining and internal upgrades for the Ethereum network. Such as an example, is the implementation of Ethereum 2.0.

In addition, the price will also be affected by external factors such as the extent to which Smart contracts, NFT tokens, and Decentralized applications based on Ethereum are implemented. 

Smart Contracts

Smart contracts, and Ethereum’s supercomputer that makes them possible, are the main difference between Ethereum and Bitcoin. The Smart contracts are also a fundamental building block in, among other things, decentralized apps and Defi projects.

Smart contracts are computer programs that perform actions, such as payments, based on set conditions. Some advantages of smart contracts are that they make it possible to carry out transactions faster, without expensive intermediaries and brokerage services, and with less risk of fraud or deviations for other reasons.

Decentralized apps

Decentralized apps are not run by a single computer or server. But by a network of individual computers distributed over a peer-to-peer network. This means that such applications do not fall under any specific authority.

Data used by the app is distributed across all nodes in the network. So it is not practical to close the decentralized app. The file sharing app BitTorrent is today the dominant protocol for file sharing. This is a good example of such a decentralized app. Other popular examples are Popcorn Time and Tor.

It has so far proved impossible for authorities to stop these types of apps. Steemit is a decentralized app that runs on a blockchain and uses this to publish content. Content that cannot be censored.

Defi

An influencing factor for the Ethereum price is Defi, which is a new and dynamic part of the crypto industry that has experienced a huge upswing recently. Defi uses decentralized apps and smart contracts to put together complicated financial services. Such as an example, decentralized crypto exchanges, or services for loans or investments.

ERC20 Tokens

It is worth mentioning ERC-20 tokens in connection with Ethereum’s price development. ERC20 tokens are built according to the same rules as Ethereum’s tokens and are therefore compatible with the Ethereum blockchain. This means that they do not need their blockchain but can instead use the secure blockchain of Ethereum.

Every time transactions are made with an ERC20 token on the Ethereum blockchain. A small amount of Ether is also needed to pay for Ethereum GAS. This means that large use of ERC20 tokens also automatically results in increased demand for Ethereum ETH.

ERC721 – Ethereum NFT tokens

It may not come as a surprise to many that the above masterpiece called “Nyan Cat” by “artist” Chris Torres sold for $590,000. Lately, interest in NFT tokens has reached new, and sometimes incomprehensible, heights.

Inflation and ETH price

Unlike Bitcoin which has a supply that is limited to 21 million, Ethereum does not have a limited supply. Ether is regularly issued from the mining of blocks in the blockchain. But this still does not mean that Ethereum has high inflation.

In Ethereum, how much is paid out for the blocks in the blockchain is determined through so-called “Ethereum Improvement Proposals “. One such proposal is EIP-1559 which from July 2021 will introduce a new practice of destroying Ether once it has been used to pay for GAS. This proposal also includes a flexible block size that will ensure that blocks are larger during periods of heavy network traffic.

Since EIP-1559 will help remove Ether from the market on an ongoing basis, many expect this to help increase the value of Ether. Another event that many believe will have a major impact on the Ethereum price is Ethereum’s transition from Proof of Work to Proof of Stake.

The effect of the Proof of stake implementation can be positive or negative depending on whether the transition goes smoothly or if problems are experienced.

Ethereum sine industry partner

One of the factors that will be important in achieving a higher Ethereum price is the extent to which companies use the Ethereum blockchain and related apps and smart contracts to solve real-world problems. So far, Ethereum has managed to get an impressive list of partners on board.

On the list, you will find well-known names such as Amazon Web Services, BNP Paribas, Citigroup, Comcast, Foxconn, Google, Intel, JP Morgan Chase, Microsoft, Samsung, and Siemens. The level of activity on the Ethereum blockchain has made Ethereum the most actively used blockchain.

The effect of Ethereum 2.0 on the ETH rate

Ethereum will soon switch its blockchain from Proof of Work to Proof of stake (PoS) ). The upgrade has many reasons, including reducing the cost of transactions and increasing the capacity of the blockchain.

The switch to PoS will also lead to a drastic reduction in Ethereum’s use of electricity. The transition from POW to PoS has already been underway since 2020, with a gradual implementation being done in several stages. Full implementation of PoS is planned for some time during 2021 or at the latest 2022. The implementation of Ethereum 2.0 is expected, if it goes as planned, to increase the value of Ethereum.

Competition

Ethereum was the first out with a good idea, but today has a lot of competition. Among other things, both Charles Hoskinson and Gavin Wood, who were part of the original Ethereum team, have gone their ways and started popular competitors to Ethereum.

ETH Price

A Cryptocurrency in constant circulation

One of the things that are special about Ethereum is that the blockchain is very active. Ethereum is more active than BTC. This comes from the fact that perhaps as much as around 60% of bitcoin is tied up in long-term investments. With a limited supply and a total amount limited to 2 million. This helps push the BTC price upwards at a rapid pace.

The growth in value of BTC, which is so loved by many, is also one of the problems that have so far prevented Bitcoin from becoming an effective Peer to Peer cryptocurrency. People simply do not want to let go of their precious BTC. Ethereum, on the other hand, is a cryptocurrency in constant circulation.

The reason for the great activity on the Ethereum blockchain is that people are not only buying Ethereum to hold them as an investment. But also to use them to run smart contracts, decentralized apps, Defi projects, and more.

When should you buy Ethereum?

In a free market, it is naturally impossible to say with certainty when it is a good time to buy (or sell) Ethereum. Nevertheless, some events can be seen as likely to result in higher ETH rates. This applies, for example, to the times when new technologies are introduced, or when Ethereum publishes news about major new cooperation agreements with private associations or the like.

When you buy ETH, it can therefore pay to either anticipate such events or wait until after things have calmed down, to buy Ethereum. Times of uncertainty and bad news is often the best time to buy. However, remember that all cryptocurrency is risky, so you should never invest more than you can bear to lose.

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