Cryptocurrency mania is in full effect, with prices for Ethereum surging ahead in May.
Also described as Bitcoin’s “younger brother”, the price of one Ether (ETH) on the Ethereum blockchain network was a short time ago worth more than $US190.00. That’s a gain of 133% since the start of the month.
Ethereum’s yearly gain has been even more impressive. Despite some volatility, the second largest cryptocurrency is currently up by 2,230% since January 1, when it was worth $US8.15.
The cryptocurrency was established in 2015, when one Ether traded for around $US0.70 (on current prices, that’s a gain of about 27,800%).
Ethereum’s surge comes amid a frenzy of recent activity in alt-coins, with multiple listings of “initial coin offerings” – the creation of exchanges to trade in virtual currencies with real money.
There are now over 800 alt-coins in the market, and the top 10 have a combined market capitalisation of around $US70 billion.
Like Bitcoin, Ethereum only has a finite number of digital coins that can be mined. It differs slightly from Bitcoin in that the currency’s platform allows it to run “smart contracts” – computing protocols which trigger automatic transactions when certain conditions are met. More on that here.
The currency caused headlines in May 2016 when its Decentralised Autonomous Organisation (DAO) – a network of smart contracts on the Ethereum blockchain – raised $US150 million via crowd-funding through the sale of Ether tokens.
The DAO was hacked in June 2016, and around $US50 million worth of Ethereum was stolen. The Ethereum community then created a hard-fork in the Ethereum blockchain, which has led to the creation of two separate active cryptocurrencies.
The currency that trades within the post-fork blockchain is referred to as Ethereum (ETH). The original currency is now called Ethereum Classic (ETC), but its value is only around one-tenth that of ETH.