It may be the holiday season, but cryptocurrencies have been playing the role of St. Nick for virtual currency investors since the beginning of the year.
When the calendar turned to 2017, the aggregate value of all cryptocurrencies combined was a mere $17.7 billion -- and bitcoin made up well over 80% of this value at one point. However, as of Dec. 14, the total cryptocurrency market cap had soared to $515 billion. For you math-phobic people, that's a return of more than 2,800%. For investors who've held throughout the entirety of this volatile year, they've possibly seen a lifetime's worth of gains.
Image source: Getty Images.
It's time we gave props to Ethereum and its 8,500% return
A lot of credit is often bestowed on bitcoin for fueling this digital currency rally, and with good reason. Bitcoin was the first tradable cryptocurrency, and it's the most widely accepted by merchants. Even now, with an aggregate market cap of $515 billion for all virtual currencies, bitcoin comprises 56% of that total.
But this rally is about more than just bitcoin. It's about the emergence of other coins and underlying blockchains that have the potential to effect positive change. Perhaps no cryptocurrency has stolen the spotlight from bitcoin in 2017 more than Ethereum. The Ether token has rallied by 8,500% this year, pushing Ethereum's market cap to $66 billion.
Why the newfound love for Ethereum among investors? It mostly has to do with Ethereum's blockchain. Blockchain is the infrastructure that digital currencies are built upon, and they're responsible for logging transaction data in a digital, distributed, and decentralized ledger. There are a host of advantages to blockchain technology, including the potential for cheaper transaction fees, since there's no middleman (i.e., bank) involved. Also, transaction settlement times could be particularly quicker utilizing blockchain since miners are working around the clock to proof encrypted transactions. This compares to traditional banking, especially cross-border transactions, where a payment or transfer of funds can be tied up for days while waiting to clear.
What's really lit a fire under Ethereum this year is the formation of the Enterprise Ethereum Alliance. Currently boasting 200 members, this Alliance is testing a version of Ethereum's blockchain across an array of industries in various pilot and small-scale projects. Few folks would deny the potential that blockchain can bring to the table, and it appears that Ethereum has done an exceptional job in attracting enterprise clients.
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