Is Ethereum on the Rise in 2021?

Since its inception in 2015, Ethereum has slowly but steadily made strides in the crypto world. Developed by a team of programmers that included Vitalik Buterin and Dr. Gavin Wood, Ethereum was intended to be an improvement on the concept of Bitcoin.

Cryptocurrencies such as Bitcoin were created to be a bulwark against government intervention that would see a rise in inflation. And through this, the concept of a decentralized and unregulated, peer-to-peer currency was formed.

Bitcoin was first used as a medium of exchange on the deep web where its pseudonymous characteristics made it suitable for the sometimes-questionable transactions there.

Following this, Bitcoin then found itself propelled to the top of every investor’s list since the 2008 cryptocurrency boom. As Bitcoin grew in popularity, many realized that the rising number of users on the network would result in a slowdown of transaction processing time.

And this is where Ethereum comes into the picture.

While Bitcoin may be the more popular of the two cryptocurrencies, the development team behind Ethereum have continually worked on upgrading its network.

This includes the implementation of Ethereum 2.0– a set of upgrades intended to speed up the Ethereum network while improving security and scalability.

Besides the introduction of Ethereum 2.0, there are plenty of other reasons why Ethereum will be on the rise in 2021.

Let’s see why:

1. Non-Fungible Tokens (NFTs)

Also known as NFTs, non-fungible tokens are a unit of data stored on the blockchain that certifies the originality of a digital asset.

Unlike cryptocurrencies, NFTs are not interchangeable which means that they are entirely unique. NFTs can be just about anything – works of art, music and even social media posts.

While some may find it ridiculous, it is not unknown for particularly prominent NFTs to be sold for millions at auctions around the world.

So, all of this is well and good, but how does it relate to Ethereum?

Well, basically NFTs are powered by the Ethereum blockchain. Transaction history and ownership data are all stored on the Ethereum blockchain which allows NFTs to be traded without the need for any third parties.

As NFTs gradually grow in popularity, we can also expect the demand for Ethereum to also rise accordingly.

2. Ethereum’s Functionality

While Bitcoin may be called digital gold, this doesn’t mean that Ethereum is anything to sniff at. Far from it actually given the flexible nature of Ethereum.

The Ethereum blockchain is able to support the development of smart contracts – something that Bitcoin is unable to do.

Smart contracts allow two parties to create a self-executing contract without having to involve any third parties. The benefits of doing so are extremely exciting and range from increased security to automated enforcement.

The creation of self-enforcing contracts is something that would force businesses to adopt higher levels of transparency – something that will be most welcome in the aftermath of the 2008 financial crisis.

One of the best things about Ethereum is that you can store it in an online wallet or in a hardware one. Check out the best Ethereum wallets in 2021 here: blog.tezro.com/best-ethereum-wallets/

3. The Rise of Decentralized Finance (DeFi) Apps 

The financial sector has traditionally been heavily centralized around several key players. Because of this, isolated communities in less developed areas or citizens living under a dictatorial government may find themselves not having access to essential financial services.

Decentralized finance applications have the potential to change all of this – by allowing users to bypass the finance sector entirely.

Instead of relying on financial intermediaries, DeFi apps use smart contracts to create financial instruments and provide services.

Ethereum ties into this because its blockchain has the capability to power DeFi apps. As the world awakens to the potential of decentralization, we can also expect to see Ethereum prices rising accordingly.

While the world of cryptocurrencies is a volatile one, there is no doubt that there is plenty of potential for Ethereum in the future.