Ether Explained - Chapter 2: Facts and figures about Ethereum

Ether Explained - Chapter 2: Facts and figures about Ethereum

25 July 2019Reading time: 5 minutes

Vontobel now offers investors access to the crypto currency «Ether». But what is Ether? And why has the second best-known crypto currency gained so much popularity in such a short time? In eight chapters, we want to give you high-quality knowledge about the exciting topic of «Ether».

Did you know that...

... measured by market capitalization ether is the second largest crypto currency in the world.

According to Coinmarketcap.com, Ethereum has a market capitalization of approximately USD 22 billion, representing a market share of 8%, while Bitcoin still dominates the crypto market with a market capitalization of USD 174 billion and a market share of 65%. However, Bitcoin has experienced a steady decline in market share as more and more «altcoins» enter the market. Other strong competitors are currently XRP, Litecoin, Bitcoin Cash and Binance Coin in terms of market capitalization.

... Ether experienced its all-time high of USD 1,377.72 per 1 ETH on 14 January 2018. 

While at the beginning of 2016 the price was just under USD 1, the currency reached new highs on a daily basis until it reached its peak in January 2018. Currently, the price level has returned to the level of July 2017 - which led many supporters to believe in a further rise.

... the Ethereum network has so far processed more than 504 million transactions.

Bitcoin in comparison has a smaller number of approx. 438 million transactions. On 4 January 2018, the Ethereum network processed the highest number of transactions: 1.3 million transactions in 24 hours. Since 1 January 2017, the average number of daily transactions has been around 500,000. For Bitcoin, the average is just 270,000 transactions measured over the same period. However, since Bitcoin's all-time high of almost USD 20,000 in December 2017 and the equally eventful price drop to USD 3,000, Bitcoin is now experiencing a massive increase in the number of daily transactions - even if they are only half as much as for Ethereum (approx. 320,000 vs. 600,000). The reason for this are the numerous usage possibilities that the Etherem blockchain offers (Smart Contracts, DApps, ICOs, ...).

... the number of Smart Contracts on the Ethereum blockchain has steadily increased.

Since June 2018, when around 200,000 Smart Contracts were created, the number has risen to over 1 million in October 2018 and almost 1.5 million in November 2018. The number is increasing because the Ethereum blockchain is the most secure smart contract platform. In addition, most «tokens» use the Ethereum platform to cost-effectively establish their project. Tokens are often used as shares in the project. They can be generated with relatively little effort on existing blockchains. A token uses the working infrastructure of Ethereum, i.e. it does not have its own blockchain, nodes or miners. Of the 100 best-known tokens by market capitalization, 92% are already built on the Ethereum platform. Of the total of 1388 tokens, 89% are built on the Ethereum platform.

... there are 2,667 distributed apps (DApps) in the entire blockchain ecosystem.

From these DApps, 2.539 (95%) DApps were implemented on the Ethereum platform. Unlike common apps such as WhatsApp, DApps are not operated, maintained or developed by a single vendor. If WhatsApp were a DApp, it would not be managed by Facebook alone. Facebook can change the software at any time, which wouldn’t be possible with Ethereum's (or Bitcoin's) decentralized software. According to a report by ConsenSys - a blockchain software technology company - 16 of the 20 most popular DApp projects are based on Ethereum. Ethereum has also made significant progress in terms of partnerships and use cases: Amazon integrated Ethereum for its Web Service (AWS). The Enterprise Ethereum Alliance organization promotes the use of the blockchain. It includes corporations such as Accenture, EY, J.P. Morgan Chase, Intel, Microsoft and IBM, and is also experiencing a steady growth in partners.

... there are 8,000 active nodes (users) interacting with the Ethereum blockchain and mining Ether.

These nodes are in over six continents and show the geographical diversity of the network. A node is any computer that connects to the crypto currency of its choice by downloading the open source software. It serves as a connection point for data transmissions in interaction with other participants of the network all over the world, which together form the backbone of the blockchain. The more nodes, the more stable the network and the faster it can work. Bitcoin has more than 9,000 nodes. Other Altcoins are (still) far away from this number of users.

... in 2017 venture capital companies invested USD 1 billion in blockchain companies, with an average investment of USD 1.5 million. In 2018 the VCs have already invested USD 4 billion, with an average investment of USD 2.5 million.

VCs provide venture capital in the form of equity capital. In contrast to traditional bank financing, venture capitalists provide long-term equity capital without providing collateral. Thus the VC participates in the economic success (or failure) of the company and at the same time secures control and co-determination rights. VCs provide capital to companies that are in the early stage or expansion stage. If the company is sold, VCs seek an exit in the form of an initial public offering (IPO) or a sale to an industrial company (trade sales). For example, «Andreessen Horowitz» - one of the most successful VCs worldwide - invests aggressively in Crypto. The company raised USD 350 million for its first crypto-oriented fund, the a16z cryptofund, which invests in crypto companies and protocols.


 

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This information is neither an investment advice nor an investment or investment strategy recommendation, but advertisement. The complete information on the securities, in particular the structure and risks associated with an investment, are described in the base prospectus, together with any supplements, as well as the final terms. The base prospectus and final terms constitute the sole binding sales documents for the securities. It is recommended that potential investors read these documents before making any investment decision in order to fully understand the potential risks and rewards of deciding to invest in the securities. The documents and the key information document are published on the website of the issuer on prospectus.vontobel.com and are available from the issuer free of charge. The approval of the prospectus should not be understood as an endorsement of the securities. The securities are products that are not simple and may be difficult to understand. This information contains an indication of past performance. Past performance is not a reliable indicator of future results.

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21/10/2019 07:31:11

 

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