It may not have had the most growth in 2017, but Ethereum has regained its place behind Bitcoin as the second-biggest cryptocurrency by market capitalization.
Not to be outdone by Bitcoin’s 1,000 percent rise in value in 2017, Ethereum also moved from $10 per Ether to $1,000 in the space of 12 months.
The two cryptocurrencies enjoyed similar success, but their underlying Blockchain technology is contrastingly different.
Ethereum’s flagship smart contract system sets it apart from Bitcoin and has led to it becoming the leading platform for ICOs, allowing developers to use the underlying code for their own applications - commonly known as decentralized applications (dapp).
This is in essence Ethereum’s raison d’étre, providing a monetized Blockchain solution for developers to create applications as described by Investopedia.
Speaking to CNBC this week, Ethereum advisor Steven Nerayoff says the open-source functionality of Ethereum’s protocol could well lead to mass adoption for a wide variety of Blockchain applications.
"You're seeing a tremendous amount of growth across a wide variety of industries. Fintech is actually the natural area, but now you're seeing it becoming increasingly more creative — you find projects in the oil and gas industry, you're finding government using it in their applications, you're seeing it in gaming, all kinds of different areas.”
The success of CryptoKitties is a prime example of how developers can use the Ethereum software to create innovative applications. The popular online game was so successful that it placed a massive strain on the Ethereum network in 2017 as it became the biggest dapp.
Inevitably, the increasing use of Ethereum will see it’s price soar, according to Nerayoff.
“What you're seeing with Ethereum is an exponential increase in the number of projects. There are billions of dollars being poured into the ecosystem right now, maybe 10 times more projects this year than last year, which could easily lead to a doubling, probably a tripling in price by the end of the year.”
Expanding market
While Nerayoff expressed bullish sentiments towards Ethereum’s growth this year, he didn’t write off the potential growth of other cryptocurrencies this year.
"The entire space is increasing. There is huge interest by the public and there are more areas in which the public can invest, even in Bitcoin, so you could just see an expansion in the entire space,"
At the time of writing, Ethereum’s total market cap was sitting at $116 bln.