Over the last week, Ethereum has seen a consistent rise in the price and volume charts, reaching a new all-time high. Today, we’re going to look at some of the facts that may influence Ethereum’s price. Knowing these factors may present you with early information and investment opportunities.
Projects built on the Ethereum Virtual Machine (EVM):
Ethereum isn’t just a currency. In fact, Ethereum isn’t a currency at all; It’s a platform that enables the creation and deployment of smart contracts and Dapps. This platform’s value token is known as Ether.
Bitcoin’s value derives from the real use-case applications that it provides: cheap, fast and p2p global transactions on a trustless network.
When trying to calculate the real value of Ether, we must note that unlike Bitcoin, Ethereum’s value does not come from the use-case applications that Ethereum provides, only. Ethereum value must derive from it’s custom token service and from all the applications and services that are built on the Ethereum Virtual Machine (EVM)
This is what Cryptocurrency Investment Guru, Tai Zen, calls the “Ethereum Stack Value.”
Tai Zen’s Youtube Channel (Cryptocurrency Market): https://www.youtube.com/channel/UC_S5FBcMfrFbeV1ZRa3dJmA
There are multi-million projects being built on the Ethereum Network, such as The DAO, Augur, Golem, and Akasha. These projects run on the Ethereum Network and use Ether as it’s fuel, meaning that all payments and transactions that are made within this projects are made with Ether. This has a positive effect on the price, rising demand for Ether while the production rate (mining) stays the same or drops. The projects built on Ethereum also have great adoption value for the Platform as it brings users from different demographics into the Ethereum world.
While none has been made recently, this is something to keep an eye on. Ethereum was designed with a stage-by-stage evolution process or roadmap, which means Ethereum is not yet complete. Staying on top of software updates, especially those that involve the transition to another stage, is a great way to have early investment information.
Mining difficulty and Global Hashrate
Production rate is an important factor when assessing the value of any cryptocurrency. Bitcoin’s halving will cut the supply in half overnight, and that will surely have an effect on the price (which we can already see has been rising). Ethereum does not have a halving. However, it’s production rate is always changing according to difficulty (which readjusts every 23 seconds) and to Global Hashrate (Amount of equipment mining Ether), which means that’s Ether’s production is constantly dropping as new members join the ranks of the mining community.