Where does the value of Ethereum come from?

The value of cryptocurrencies can be difficult to understand, which has led some traders to be cautious in the field. It's not hard to see why Ethereum is such a profitable cryptocurrency, as it is the basis of digital fuels and is often compared to the next generation of the internet.

As discussed in the previous article "Where Does Bitcoin Value Come From", Bitcoin can be compared to digital gold. As the first blockchain in history, Bitcoin had many issues that remained unresolved until the advent of cryptocurrencies.

The biggest problem with Bitcoin is that it can only be used for payments. Bitcoin's simplicity helped it become a true digital market in value, but it couldn't achieve greater value. Just like paying with real gold, it can be slow and expensive depending on the number of people trying to send transactions at the same time. Bitcoin can only do 7-9 transactions per second, which is nowhere near enough to think this is the future of money.

Ethereum appeared to add additional functionality to the blockchain. The particularity of Ethereum is the possibility of creating smart contracts.

Today all contracts have been signed. However, in an increasingly globalized economy, legislation varies by region and many questions have been raised about the governance of contracts.

In addition, brokers pay a fee each time a contract is signed. Unlike regular contracts, smart contracts have a clear definition of rules and goals.

These smart contracts can be created with almost no restrictions. Today, almost any contract can be rewritten as smart contract to be more efficient. Borrowing, bartering, gambling, insurance, and many other businesses can be affected by smart contracts.

This is where Ethereum comes in. Like Bitcoin, it can be used as a medium for price trading and storage. However, unlike Bitcoin, smart contracts can be printed on the blockchain.

This means that smart contracts that guarantee integrity and security without compromise can benefit from distributed and unaltered blockchains.

Just as the Bitcoin blockchain uses Bitcoin as its "local" currency, the ETHereum blockchain uses Ethereum (ETH) as its local currency. This means that all exchange fees are paid in ETH. Therefore, whenever a user intelligently concludes, they have to buy ETH as the exchange rate.

Ethereum can also be mined. Unlike Bitcoin, some Ethereum is included in trading with miners, but a significant portion has gone and gone. Ethereum is still upgrading and can theoretically handle 100,000 changes per second, which is very fast.

Ethereum is helping to create the next generation of the Internet. Goldman Sachs and the European Investment Bank used Ethereum to digitize their contracts and resolve them entirely on the blockchain. Other companies, such as Amazon, IBM, and Microsoft, also paid for Ethereum, but it was only a matter of time before Ethereum became the payment platform, settlement, and ecosystem. next-generation digital technology.