The cryptocurrency market is trading down by roughly 10% today (Thursday January 6) as US stock markets are shaken by plans to strip back pandemic monetary measures and political turmoil in Kazakhstan takes its toll on crypto mining operations.
Ethereum’s price dropped by 13% on the last 24 hours to under $3,500 in value as sell-offs on US stock markets were reflected in a 86% increase in 24 hour trading volume for the world's second largest cryptocurrency, with many crypto investors looking to buy the Ethereum price dip.
But despite the latest fall in Ether, the major cryptocurrency remains a favourite among crypto fans, decentralised app developers and investors.
Ethereum’s price has skyrocketed along with Bitcoin in the past year, reaching an initial high of $4,000 in May’s crypto boom before spiking to a new record high of almost $5,000 in late October and early November.
But investors are now looking to Ethereum price predictions as the cryptocurrency is set to be transformed by a seismic upgrade to Proof of Stake technology in early 2022 with the arrival of Ethereum 2.0.
Here’s everything you need to know about the cryptocurrency, including what Ether is worth today, what Ethereum is, ETH price predictions and when Ethereum 2.0 releases are expected.
What is Ethereum?
Initially released in 2015, Ethereum is a public, open source blockchain network which primarily facilitates the creation of decentralised Digital Applications (known as ‘Dapps’) and smart contracts – programmes which run automatically on a blockchain when conditions are met.
Unlike the applications many of us use daily, smart contracts are immune to the usual problems that confound regular app usage such as downtime and interference from third-parties.
Famously known as being ‘the world’s first programmable blockchain’, the Ethereum platform supports developers in creating decentralised applications set to run on a peered network of computers or blockchain, rather than be managed by a single authority.
But Ethereum also operates as a cryptocurrency, Ether, which can be bought, sold and exchanged as a digital currency across its own peer-to-peer (P2P) network – with transactions taking place anonymously and verified through Proof of Work mechanisms.
Developers looking to build apps on Ethereum have to pay a fee to do so, which is paid in Ether and commonly known as ‘gas fees’.
These have soared as more Dapp developers looked to the growing popularity and potential for decentralised applications, helping to usher Ethereum’s value as a cryptocurrency and platform combined to new heights.
It was brought to life by Canadian-Russian programmer Vitalik Buterin, who recently revealed that his path to creating the blockchain began in his childhood, when World of Warcraft producer Blizzard weakened his favourite character’s spell in World of Warcraft.
"On that day I realized what horrors centralized services can bring,” Buterin wrote on his about.me biography.
How is Ethereum different to Bitcoin?
While the two cryptocurrencies share a similar swell of popularity and support amongst the crypto community, Bitcoin and Ethereum have some major differences.
Most notably, Bitcoin operates as a means of monitoring cryptocurrency transactions and ownership on its blockchain while Ethereum supports wider uses, such as smart contracts, digital asset development and Dapps.
Ethereum’s public blockchain network also differs to Bitcoin as it is set to move to Proof of Stake (PoS) verifications of blocks mined on the network instead of Proof of Work (PoW), currently used by Ethereum and Bitcoin.
Proof of work validation demands huge amounts of computational energy as the Bitcoin blockchain grows, with the process of mining – verifying transactions added to the network as ‘blocks’ in a chain of transactions by getting computers to solve difficult cryptographic puzzles – requiring considerable electricity and power.
PoS verification instead sees transactions validated according to the number of coins and share held by a miner, which determines their mining power on the blockchain and reduces the energy consumption seen in PoW.
What is Ethereum’s price today?
As of 10.20am on Thursday (January 6), Ether was trading at $3,322.85 (£2,458.86) according to Coinbase – down approximately 13.19% on the last 24 hours.
Ethereum’s price today marks a considerable fall on the last month, when Ether was fluctuating at around $4,000 in value.
The cryptocurrency’s worth is also down by more than 8% on the last week at the time of writing, but with its trading volume up by 87.86% at $25,756,509,541 as per crypto data analysis platform CoinMarketCap.
Ethereum’s market cap is currently $398,129,873,089.
According to data compiled by the ETC Group, the boost to Ethereum in 2021 appears to have been helped by increased NFT sales, which are up by almost 20,000% year on year.
The cryptocurrency’s market cap has grown by almost 10% on the last year as the crypto art and virtual items trend of Non-Fungible Tokens took off, with NFTs underpinned by Ethereum technology and traded with ETH.
Ethereum’s growth has led more bullish crypto market analysts to estimate that the cryptocurrency could reach $5,000 in value by the end of 2021, while other price predictions see the currency stabilise at its current value of roughly $4,500 until 2022.
With the arrival of Ethereum 2.0, however, analysts expect such as Wallet Investor, with price predictions calculated by Machine Learning, predict that the average price of Ethereum could reach almost $8,000 by the end of 2022, $10,000 in 2023 and over $16,000 by 2025.
When is Ethereum 2.0’s full release date?
Ethereum 2.0 is the much-awaited set of upgrades to the existing Ethereum blockchain and one used to describe the blockchain’s move to a PoS verification concept.
Also known as 'Serenity’, the shift to ETH2 is eagerly anticipated by crypto fans as it will seek the speed, sustainability and scalability of transactions and Dapp performance on the network increase in moving away from the existing Ethereum mainnet.
Parts of the transition to Ethereum 2.0 have already taken place, such as the creation of the Beacon Chain as the underlying cooperation mechanism for the new PoS-based Ethereum blockchain.
But the merge between the existing Ethereum blockchain and the Beacon Chain has not yet taken place, with developers expecting it to fall in quarter one or two next year.
And ‘sharding’, the final stage of the upgrade, designed to reduce network congestion and bottlenecking by splitting transactions up across a horizontal database into new, individual chains known as ‘shards’, will take place after the merge in 2022.