In late November 2017, economists and financial analysts were closely following the exchange rate of Bitcoin, the world’s most valuable and controversial digital currency. Bitcoin has just reached the mythical value of $10,000 per token, an amazing feat when considering that this cryptocurrency was only worth a few pennies less than 10 years ago.
It is easy to see why Bitcoin is constantly in the news; after all, quite a few people have become millionaires just by virtue of having acquired this currency at the right time a few years ago. Despite its popularity and worth as a digital asset, Bitcoin is hardly the most advanced cryptocurrency; that honor goes to Ethereum, which was worth $475 on the day that Bitcoin was dancing around the aforementioned $10,000 exchange rate.
Similar to Bitcoin (BTC), Ethereum (ETC) is supported by an open-source blockchain platform; in fact, all modern cryptocurrencies on the market are tokens derived from distributed ledger technology. What is interesting about Ethereum is that its development team is focused on more than just digital currencies; virtually any type of financial contract can be arranged, executed and recorded on the ETH blockchain. To this effect, a state-owned bank in Russia called on Vitalik Buterin, main developer of ETH, to work on a special project to create a digital version of the ruble. A similar action has been undertaken by the central bank of Singapore, which has already created a cryptocurrency version of its dollar.
The Bank of Canada has decided to partner with Singapore to test the aforementioned blockchain project. Although the blockchain that supports the ETH cryptocurrency is decentralized like Bitcoin, the open source nature of the platform allows sovereign central banks to modify the software so that they can exert monetary control.
The ETH blockchain is being upgraded to a 2.0 version that will likely launch in 2018. Even though there are hundreds of cryptocurrencies being traded at any given time around the world, none of them have shown the mature promise of Ethereum, and this is something that makes it very attractive.
Individuals who are interested in blockchain development should pay closer attention to ETH than Bitcoin at this time. One of the reasons why central banks are warming up to ETH instead of BTC is that the Ethereum blockchain presents greater stability and the capacity to scale accordingly. The fact that ETH is on track to reach the $500 benchmark value is beside the point; Ethereum is clearly the future of real-world cryptocurrency development.