KUALA LUMPUR, MALAYSIA - Media OutReach Newswire - 31 May 2024 - With the current capitalisation of 468.42 billion USD, Ethereum (ETH) is the second-largest cryptocurrency network by market capitalisation after Bitcoin. As many experts point out, Ethereum is well-positioned to remain a crypto powerhouse for many years to come. What makes this digital asset so unique, and what drove its robust growth over the recent years? In this article, the experts at Octa, a financial broker with globally recognised licences, give a rundown of the ETH's impressive ascent in the world of cryptocurrencies. In the week ending on 26 May, the price of Ethereum (ETH) gained nearly 25%, rising as high as 3,900 USD. The 4,000 USD price mark, crossed last in March, is clearly in sight after the US Securities and Exchange Commission approved the listing and trading of spot Ethereum exchange-traded funds (ETFs). In the long-term perspective, the situation also looks highly promising for the ETH ecosystem as its prospects are buoyed by the growing adoption in various sectors and the strong developer community. Since becoming the second-largest cryptocurrency behind Bitcoin in 2018, ETH has maintained this position. But what makes it so successful in the highly volatile cryptocurrency market? A new era of blockchain technology The idea of Ethereum was born in the mind of Vitalik Buterin, a visionary entrepreneur and cryptocurrency enthusiast. He first became engrossed in blockchain technology in 2011 and two years later proposed his own blockchain platform, Ethereum, as a new type of digital environment that can go beyond financial transactions. The Ethereum project was crowdfunded in 2014, raising over 18 million USD in Bitcoin, and the network went live on 30 July 2015. While Bitcoin was created as a decentralised digital currency to serve as an alternative to traditional currencies, ETH aimed to extend the capabilities of blockchain technology. In comparison to Bitcoin, Ethereum offers a more versatile blockchain capable of supporting smart contracts, which are self-executing contracts with the terms directly written into code. The new blockchain allowed for revolutionary possibilities: users could build new cryptocurrencies based on Ethereum by creating an ERC-20 token, which is a technical standard for establishing fungible assets on the Ethereum blockchain. Many altcoins were created based this way, allowing for a wide range of applications. For example, one of the top Ethereum-based altcoins is Chainlink, or LINK—a decentralised Oracle network that allows smart contracts on Ethereum to securely interact with real-world data, APIs, and other external sources. The new versatile framework facilitated the development of various decentralised solutions. The existing practical applications of Ethereum include:

• Decentralized finance: Ethereum-based applications aim to recreate traditional financial systems with blockchain technology. They provide services such as lending and borrowing cryptocurrencies without intermediaries, decentralised peer-to-peer exchange, and stablecoins (cryptocurrencies that are pegged to another asset to maintain a stable price, for example, USDT.)
• Non-fungible tokens (NFTs): NFTs are unique digital assets that represent ownership of a specific item or piece of content. They are often used for creating and selling digital art. NFTs are also popular in gaming, where they are used to represent in-game items, characters, and virtual land. Some tokens, including 'Pudgy Penguins' and 'Mutant Ape Yacht Club' collections, even gained worldwide notoriety and were widely discussed in media.
• Decentralised applications (dApps): Ethereum supports a wide range of applications across various industries, including gaming, social media, and digital marketplaces. The most popular dApps include MakerDAO and Brave browser.
• Identity and authentication: Decentralised identity solutions leverage Ethereum to give users control over their personal data.

Ethereum 2.0: a leap into the unknown On 15 September 2022, Ethereum introduced a new phase in the development and evolution of its blockchain by transitioning to Ethereum 2.0. The upgraded platform boasted the following advantages:

• New consensus mechanism. A consensus mechanism is a protocol that ensures that a transaction is reflected in the blockchain as soon as it gets validated. With Ethereum 2.0, the ETH ecosystem switched from the proof-of-work (PoW) to the proof-of-stake (PoS) mechanism. Among other advantages, PoS is more secure, less energy-intensive, and better for implementing new scaling solutions compared to the previous architecture.
• Significant improvement in scalability and performance. Ethereum 1.0 had scalability limitations, handling about 15 transactions per second. That could lead to network congestion, resulting in high gas (fees required to successfully conduct a transaction or execute a contract) and slow transaction times....