Home / Ethereum / How is the price of Ethereum determined?

How is the price of Ethereum determined?



Of& nbspKapil Gauhar

Ethereum is a public network, P2P or blockchain with its cryptocurrency called Ether.

Created by Vitalik Buterin in 2014, the aim of Ethereum is to be a platform on which intelligent contracts can be managed.

In a simpler term, Ethereum is intended to be a world computer.

Where Bitcoin stores a list of transactions on its blockchain, the Ethereum blockchain is designed to store different types of data, which can be accessed and used by computer programs running on the Ethereum blockchain.

You can also read: Ethereum Mining Explained

About the price of Ethereum

Many people ask how the price of ethereum (cryptocurrency) is determined.

Before going into this question, it is important to know that it does not work differently than other currencies.

The price of Ethereum is determined in the same way as everything else – through a social consensus.

Now what does this mean?

It means that the price of Ethereum is based on what the owner will sell it and the buyer would pay for it.

The price of the seller is usually referred to as the "asking price" and what is referred to as the "bid price".

The lower space between the two prices is called "spread" and the last transaction is the "current price".

You can also read: What is the mining of cryptocurrency?

L & # 39; example

Gold, property, shares and even legal currencies are valued the same way.

For example,

If tomorrow someone is willing to give you 90 cents of goods for a dollar, then you should accept the price or wait for the value to rise. Also, you can offer that dollar for 95 cents of merchandise.

It is basically a backstroke on one side and another, which prices everything in the market.

Essentially, an Ether worth whatever you are, seller and buyer, agrees that it's worth it.

You can also read: Bitcoin Mining Pool Explained

"Ethereum can not be worth anything" is a MYTH!

For those who say that Ethereum or Bitcoin can not hold anything because they are not supported by anything, they are completely wrong.

These people will argue that the US dollar and other brands are backed by the country's resources. The question here is, "Who decides what is the value worth?"

The answer to the question is simple.

A dollar is worth a dollar because of the social consensus made by the donor and the recipient of the currency.

Likewise, if the social consensus decides that an Aether is worth $ 1 million dollars, both from the buyer and the seller who consent to such terms, an Ether would be worth $ 1 million.

You can also read: 5 best Bitcoin extraction hardware

Final thought!

Investors and traders use the fundamentals of Ether to make the best possible assumptions about its future value. They take Ether's demand, supply and market conditions today and try to determine what the current market price will be.

In the case of Ethereum, it has limited availability and can be used to create smart blockchain-based contracts on its network with a growing user base.

All this indicates the future price of Ethereum which is becoming higher than it is today. Although, Ethereum has competitors, which could take its market share by proving to be a better network for intelligent contract applications.

And if that happens, then Ethereum could lose its value.

These are the speculations used to determine whether or not Ethereum is a good addition to a portfolio.

Here are some articles for you to read. Next:

Kapil Gauhar

Kapil Gauhar is the founder of Blogger's Gyan. He is a passionate blogger, a great thinker and a creative writer. His passion for making friends with words and making people aware of the wonders of the digital world is what drives him to write as a career.


Source link