Ethereum surges, overtaking Ripples market cap for the second time

Ethereum is a decentralized platform that runs smart contracts, applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference. Ether is the internal ‘fuel’ of Ethereum, needed to pay the network for the resources they consume.

On February 11, 2016, the market cap of Ether (ETH) surpassed the US$356 million mark, recording a staggering 30.79% 24-hour price growth. Ether also recorded an average volume of US$23 million, displaying a 287% monthly volume increase.

The sudden spike in the volume of Ether allowed the cryptocurrency to surpass the value of Ripple (XRP), a dominant digital currency used in the Ripple remittance and international payments network.

Cryptocurrency exchanges including ShapeShift.io experienced an unexpected surge in demand for Ether, with daily volume skyrocketing. ShapeShift CEO Erik Voorhees announced that the firm is working on advanced Ethereum functionality and customer service, in response to the surging demand.

“We had a whirlwind day today at ShapeShift. Over $500,000 worth of BTC/ETH trades in the past 24 hours. This blows away our previous daily volume record.”
— – Erik Voorhees, ShapeShift Co-founder and CEO

The price of Ether experienced a similar surge in early February, when Voorhees announced that Ethereum overtook Ripple in market cap, surpassing US$14 million in daily volume.

Because of Ethereum’s strong performance over the past few months, bitcoin enthusiasts and experts are beginning to state that bitcoin and Ethereum will succeed based on their own distinctive advantages. Experts including Voorhees, Onename’s Ryan Walker and Epicenter Bitcoin believe that Ethereum offers a solution that complements bitcoin, unlike other competing cryptocurrencies like Litecoin.

In an interview, Voorhees further emphasized that the surge in Ether volume at ShapeShift has been consistent all month, and that it makes much more sense for Ether to be the number 2 digital currency, instead of Litecoin.

“Ethereum will cross a billion dollars market cap this rally. The market shall mark it Bitcoin’s equal.”
— – Meher Roy, Epicenter Bitcoin Co-Host

Ethereum was crowdfunded in 2014, by fans all around the world. The project is developed by ETHDEV, with contributions from across the globe. The Ethereum projects first release is Frontier, tailored specifically for developers. It’s a command line only interface with a Javascript environment that allows building, testing, deploying and using decentralized applications on the Ethereum blockchain.

The value of Ether began to surge at a rapid rate in early January, after the R3 consortium and Microsoft Azure announced successful integrations of the Ethereum protocol.

Microsoft Azure has been working with Ethereum since late 2015. The cloud based computer platform is aiming to offer a decentralized smart contracts-based cloud service to its institutional users. On January 28, Microsoft Azure secured several partners that offer distributed ledger technologies that work with Ethereum, including MultiChain, CoinPrism and Eris. The integration of global bitcoin processor and merchant payment service provider BitPay and other cryptocurrency startups like Emercoin contributed to the increase in Ether volume.

The R3 consortium is a collaborative project involving some of the world’s largest multi-billion dollar banks – Citibank, JP Morgan Chase and Wells Fargo to name a few. A few weeks after the Azure announcement, R3 announced that the group had completed the development of a shared distributed ledger banking platform, built on the Ethereum network.

The R3 consortium’s private distributed ledger platform connected Barclays, BMO Financial Group, Credit Suisse, Commonwealth Bank of Australia, HSBC, Natixis, Royal Bank of Scotland, TD Bank, UBS, UniCredit and Wells Fargo, allowing these financial establishments to settle and execute financial transactions instantaneously, on the Ethereum network.

"R3 is significantly advancing the use case portfolio of Ethereum, and we are encouraged and excited by that. […] Though it’s worth mentioning that we are sure that there are still many implementation hurdles left to overcome, this exercise further validates the utility of smart contract consensus technology."
— – George Hallam, Ethereum Foundation External Relations Director