Ethereum is a decentralized crypto currency released in 2015 and is currently ranked number 2 with a market capitalization of $25 billion, it’s the second largest from bitcoin. With is supply of 111 million you might think that it will affect its price and value as it seems like it’s too much but well it’s not only supply which determines how the crypto currency coin gain value.
We are going at some factors which determines the success of a crypto currency.
How is demand created?
Demand is what every crypto currency need for it to make it in the market and that determines its dominance or survival amongst other coins. Demand and supply has to be well balanced, there shouldn’t be too much supply if the demand is low as this will dilute the value of the crypto currency, but on the other hand supply plays a role in stabilizing the price.
The crypto currency has to be well marketed and introduced to the market so as to create awareness then after its know a lot of work has to be done to make the coin more powerful e.g. making sure its accepted as a payment method and other services.
How Ethereum manages to create a huge demand?
Mostly all crypto currencies would like to accept as a digital payment method by merchants, but with a lot of competition there should be a diversification of different methods because almost every currency they work on faster transaction confirmation and security mostly, but with every coin with those features the probability of being the preferred one will be low. Ethereum did not just rely on being accepted as a payment method instead they went further with its powerful blockchain and these following are now its major forces:
•Smart contracts
• Tokens
• Dapps Smart contracts.
Smart contract are agreement signed between two parties and they are signed digitally and stored on the public blockchain and Ethereum blockchain is the mainly used blockchain.
Tokens.
Today there are various token being introduced on the market and a lot of them are running on the Ethereum blockchain, the ethersan.
Dapps.
Developer are creating applications known as Dapps and they are also based on the Ethereum blockchain and they are for signing contracts as well. Amazon an online merchant is now accepting Ethereum as a payment method and a lot of companies have adopted Ethereum and its products.
Conclusion
So with all these Ethereum has proved to becoming more powerful against other crypto currencies and soon it will be the leading currencies since it has so much to do which create more demand in return. Bitcoin and others might be good crypto currencies but Ethereum is about to get on top of the stairs.