Watch out bitcoin: Competitor cryptocurrency Ethereum's value is already up 1,100 per cent this year

Francesca Washtell
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Ethereum founder Vitalik Buterin (Source: Getty)

Watch out bitcoin, there's a new kid firmly on the block.

Bitcoin competitor Ethereum has shot up in value to become the world's fastest growing major cryptocurrency since the start of this year, growing by 1,100 per cent since the beginning of January.

In comparison, the price of bitcoin has grown by around five per cent since the start of 2016. The latest bitcoin price, according to CoinDesk, was $422.38, though this is historically down from the highs of nearly $1,000 the currency reached in December 2013.

The most recent price of Ether, the competitor currency run and managed by the Ethereum blockchain platform, was $14.78 vs the US dollar, according to Coin Market Cap.

Since February, the price of Ether has increased from around $2.50 vs the US dollar to almost breaching the $15 mark twice since then. The cryptocurrency's market capitalization briefly crossed into the $1.1bn mark, up from $72m at the beginning of 2016 since mid-March, reported MarketWatch.

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Ether runs on the Ethereum blockchain, which is a distributed application platform that runs smart contracts. Ethereum describes these contracts as "applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference".

These apps run on a custom built blockchain, an enormously powerful shared global infrastructure that can move value around and represent the ownership of property.

Blockchain is widely known as the technology that underpins cryptocurrencies such as bitcoin and works as a decentralised, secure public ledger of transactions shared by a network of users.

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Token-holders of Ether (who are a bit like shareholders) are able to invest in smart-contract projects that run on the Ethereum blockchain – operating like a decentralised, democratic venture capital fund.

Ethereum is increasingly the best-known blockchain in the distributed ledger world, because of how successfully it has allowed people to build and run smart contracts on it.

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