Ethereum is currently trading at a price of $ 3175 and is the second-largest cryptocurrency by capitalization. What are the main reasons for the dominance of this cryptocurrency?
- A completely new type of communication
Applications that are based on Ethereum can have a significant impact on various public services. It will be possible to use the platform for trading derivatives or securities in the near future. Ethereum focuses on an unprecedented new level of innovation, which makes this network incredibly valuable. The Ethereum network is constantly being scaled and improved, as it is backed by a huge number of high-class developers and an extensive user base.
- Proof-of-Stake Model
The creator of Ethereum, Vitalik Buterin, promised to switch to the Proof-of-Stake model at the end of this year, which is also referred to as Ethereum 2.0, where the reward system will be completely redesigned. In this model, miners will be replaced by transaction validators, which in turn, will lead to the fact that you will no longer have to face and solve various cryptographic problems. With the launch of the Ethereum 2.0 model, the main altcoin can surge to incredible heights and play the most significant role in the global financial digital system, as well as be more environmentally friendly compared to Bitcoin.
- Speed and scalability
Here, the main altcoin also differs from digital gold, and there are 2 key indicators for this. The Ethereum transaction will be displayed in about 4-5 minutes, and in order to conduct a Bitcoin transaction, the user will need about 35-40 minutes on average. For Bitcoin, the main priority is security, which leads to the fact that the speed of the transaction significantly decreases.
The coding language makes it difficult to crack the blockchain, but the speed suffers, and the new Proof-of-Stake update will provide users with the fastest possible opportunity to conduct transactions. According to many sources, the throughput of Proof-of-Stake will reach 15,000 transactions per second. This can put Ethereum on the scales with absolutely any centralized payment system when it comes to the speed of transactions.
- Unlimited stock
Many people consider Bitcoin as an accumulative asset and protection against inflation, but Bitcoin has limited reserves, which are estimated at 21 million cryptomonets. Meanwhile, the main altcoin has an unlimited number of tokens. However, there are annual norms for the amount of Ethereum that is extracted during mining.
- Independence from Bitcoin
At the moment, investors no longer see the connection of bitcoin Ethereum and there is no longer a correlation in the market when Bitcoin rises or falls and pulls Ethereum with it. In 2020, the correlation between Bitcoin and Ethereum was only 0.95. At the moment, the price of bitcoin is not the key point in determining the price of Ethereum.
