Ethereum, the world’s second-largest cryptocurrencyby market cap, has an exciting future ahead in 2023. The underlying technology behind Ethereum has demonstrated long-term potential and proven to be resilient to market volatility. Let’s take a look at why investors and traders are betting on Ethereum this year.
Ethereum and Ether
For clarity, Ethereum refers to the Ethereum network, a global decentralized software platform that facilitates the creation of blockchain-based software applications known as dApps, which form the basis for some of the most interesting applications of blockchain, such as smart contracts and DeFi. It’s these blockchain tools that are making inroads in industries such as finance, logistics, supply chain management, NFTs and digital collectibles, and so on.
Ethereum can also be used to refer to what is more properly called Ether, the digital currency that is earned and spent on the Ethereum network to keep it running and reward users. Ether is what is more interesting to traders as a speculative asset. It has historically seen huge increases in value, rising from $1.35 in 2015 to $4444.53 in 2021. The price of Ether did fall along with Bitcoin during the extended crypto winter of 2022, dropping to under $1200 at the end of last year. However, the crypto market is picking up in the new year, and Ether has already surged to over $1500 at the time of writing.
The Ethereum Merge and Proof Of Stake
There’s a reason why Ethereum has seen so much interest from investors. Unlike Bitcoin, Ethereum is actively being developed and improved to offer more value. The latest significant update was called The Merge and rolled out toward the end of 2022. It increased the speed and lowered the cost of transactions on the network by upgrading from a proof-of-work consensus model to a proof-of-stake method. This also cut down energy consumption on the network by 99%.
Innovations like this are what give Ethereum its potential to overtake Bitcoin in 2023. Whenever a company commissions new blockchain software development, there’s a good chance that it will be based on Ethereum, making it more popular for developers, investors, and traders.
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