Ethereum: Cryptocurrency price figures spike overnight
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Bitcoin’s volatility has continued this week after the cryptocurrency crashed before immediately increasing to a higher price again. On Monday, Bitcoin suffered a tough day before a dramatic crash that took it below $40,000 (£29,493), thought to be an important price for the fortunes of the cryptocurrency. Experts had feared that if Bitcoin dropped through that price, it could go into further falls as market confidence continued to wane. The price was at $40,700 (£30,008), dropped to $39,700 (£29,271) within minutes, and was then trading back at above $41,000 (£30,229) just moments later.
This comes after it hit record highs in November, crashed this week, and then immediately increased to a higher price again.
There is a lot of debate in the world of crypto surrounding which blockchains and which coins will succeed in the future.
Most cryptocurrencies use blockchain technology to record transactions.
Bitcoin is traded on the Bitcoin blockchain.
Carol Alexander, finance expert at Sussex University, believes cryptocurrencies such as Ether and DOT will be the “currencies of the future”.
She says Web 3.0, the third version of the internet that experts claim will incorporate decentralisation based on blockchains, will favour cryptocurrencies Ether, DOT, ADA and SOL.
Ether, DOT, ADA and SOL are traded on the Ethereum, Polkadot, Cardano and Solana blockchains respectively.
Prof Alexander says they will enjoy more prominence on Web 3.0 because, unlike Bitcoin, they can carry smart contracts.
Smart contracts are used in blockchains to outline agreements between two parties in an automated way, rather than through human interaction.
For example, instead of needing a bank to approve a fund transfer from client to contractor, the process can happen automatically.
Prof Alexander explained further why she believes Ether, DOT, ADA and SOL will surpass Bitcoin.
She told Express.co.uk: “Web 3.0 is here now, and it’s growing. Bitcoin is a blockchain that can’t carry smart contracts. It was a joke from the beginning.
“Ethereum, Polkadot, Cardano and Solana were designed specially for smart contracts.
“The Bitcoin blockchain is obsolete, and if the coin is useless, it just becomes a speculative asset that can be played with by Wall Street giants.
“2022 will be the year of the coin. Ether, DOT, ADA and SOL – these coins power very good blockchains which power Web 3.0.
“Bitcoin uses up far too much energy, these other coins don’t. 2022 will be the year of the coin, but not Bitcoin.”
She continued: “Ether, DOT, ADA and SOL are going to become really important commodities because you will need them to put things on the blockchain.
“They will be the currencies of the future in a way. Maybe decades from now, they will be the currencies.
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“This is way far into the future, but the pound, the dollar, the yen will no longer have the relevance that currencies for blockchains have, which will be international.
“The global economy will be powered by blockchains, not countries. This is where I see it ending up.”
Despite Prof Alexander’s scepticism, Bitcoin still has many backers.
Goldman Sachs said last week that Bitcoin could reach a milestone value of $100,000 (£74,000) this year as it continues to take market share from gold.
Analysts at the Wall Street bank estimate that Bitcoin’s market capitalisation is just under $700billion (£516billion).
The bank added that, while Bitcoin’s consumption of natural resources may be a barrier to institutional adoption, this wouldn’t hurt demand for the asset.
Express.co.uk does not give financial advice. The journalists who worked on this article do not own any cryptocurrency.
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