Ethereum’s rise and development makes headlines

Ethereum, considered by many to be the most promising altcoin, has also gained attention from the New York Times. The Recorder also featured Ethereum in a feature article, noting that its value has increased by 1,000% in the last three months, attracting the interest of large financial companies that use it for private blockchains and smart contracts. The first public version of Ethereum will be released soon.

The report also notes that the numerous applications built on Ethereum allow for new ways to place bets, pay bills, and even launch Ponzi schemes.

Some cryptocurrency observers claim that Ethereum will face more security issues than Bitcoin because its software is more complex. Altcoin systems have undergone less testing and are subject to more attacks than Bitcoin. The unusual design may also attract more regulatory scrutiny, given that some potentially fraudulent contracts can be written into the system.

Functional drawing benefits

However, the system’s capabilities are already generating revenue for large corporations, and last year IBM announced it was testing an alternative currency system as a way to manage real-world objects on the Internet of Things.

Microsoft has also been busy making it easier for people to use various Ethereum projects on its Azure cloud computing.

Marley Gray, Microsoft’s director of development strategy, said Ethereum is a platform that solves problems in different industries, calling it the most “excellent” solution to date.

Private blockchain expansion

Many companies have created private blockchains using Ethereum. These private blockchains could eventually undermine the value of Ether, the unit that people buy in the alternative currency system.

Major banks have expressed strong interest in using blockchain to transfer and trade funds more efficiently. Some banks have already begun studying how to use Ethereum. JPMorgan has also developed a tool called Masala to interact with its internal database and the Ethereum blockchain.

Michael Novogratz, who leads bitcoin investments at private equity firm Fortress Investing Group and has been studying Ethereum since leaving Fortress last fall, said he has bought a large amount of ether.

Novogratz said alternative currencies have gained more validation in the past few months.

Ethereum surges in value

Since the beginning of the year, the value of ether has risen from $1 to $12, and at times has topped $1 billion, making it more valuable than any other virtual currency except bitcoin, which was valued at $6 billion last week.

Ethereum leaves all altcoins behind.

One difference between Ethereum and Bitcoin is that Ethereum is presented in a more transparent way. When Bitcoin was created by Satoshi Nakamoto (whose identity remains a mystery), Ethereum was being developed by 21-year-old Russian Vitalik Buterin , who created it after dropping out of the University of Waterloo in Ontario.

The goal is smart contracts

The basic purpose of Ethereum is to enable people to write protocols for the blockchain. This is the concept of smart contracts. For example, two people can program a sports bet directly into the Ethereum blockchain. Once a mutually acceptable organization publishes the final score (such as the Associated Press), the prize money is automatically transferred to the winner.

Ether can be used as a currency. Ether is also the payment currency required for the network to process gambling.

Ethereum has been characterized as a shared computer operated by a network of users, where resources are issued and paid for in Ether.

Buterin's team raised $18 million in a pre-sale of ether in 2014 to fund the Ethereum Foundation and support software development.

Ethereum Followers

Ethereum has attracted a large number of followers who support the software and hope that the value of the ether currency will rise. Last week, the number of nodes, or computers, supporting the network reached 5,800. The bitcoin network has about 7,400.

Joseph Lubin, the co-founder of ConsenSys, has hired more than 50 developers to build applications on alternative currency systems, including one that allows music distribution and another that allows new types of financial audits.

Lubin said he became interested in Ethereum after seeing it fulfill the promise that bitcoin had not, particularly in enabling new types of online markets and contracts.

Joseph Bonneau, a computer science researcher at Stanford University, said Ethereum was the first system to pique his interest after Bitcoin.

But there are still many uncertainties about Ethereum. Bonneau said that Bitcoin may still be the safest currency at present, and Ethereum is the second. He also said that the life of Ethereum will depend on the extent to which the actual market develops around it.