Ethereum, the 'new kid' in digital currency, is beating the bitcoin

Reports of introducing trading services in alternate currency is making rounds in India

Alternate digital currency ethereum is competing with bitcoin after posting a sharp jump at $233, from $8.24 in January. The new currency picked up along with bitcoin, which crossed the $2,700 level last week. 

Bitcoin fell from an all-time-high to $1,800 in two days before settling at $2,400 on Thursday. Meanwhile, ethereum signalled higher strength than bitcoin by posting a sharp recovery from $100. 

At present, bitcoin is the largest digital currency despite its market cap falling below 50 per cent this year.

Indian exchanges have not been offering trading services in alternate currencies but reports of a launch is making rounds. Sandeep Goenka, co-founder of Zebpay, India’s largest bitcoin exchange said: “We are planning to launch altcoins like ethereum for trading on our platform in August.”

Total market cap of all digital currencies is now at $86 billion, out of which bitcoin's share has fallen to 45 per cent and ethereum has witnessed a sharp increase in market share at $20 billion.

Ethereum has been backed by major firms including JPMorgan, Microsoft and Intel. The new currency has been designed to support smart contract applications, which is a computer program that can automatically execute the terms of a contract when certain conditions are met. Barclays, for example, has used similar technology to trade derivatives.

For instance, a contract can be designed among individuals wanting to bet on cricket if the certain conditions are met. In the corporate sector, a company has signed a contract, fee will be paid using ethereum after the completion of contract terms.

While bitcoin has been getting support from governments and investors, the Ethereum blockchain has been backed by corporates wishing to use the technology for smart contract applications.

A group called the Enterprise Ethereum Alliance (EEA) was recently founded to connect large companies to technology vendors in order to work on projects using the blockchain.

EEA on Tuesday announced the joining of another 86 firms in the alliance, which in turn helps the cryptocurrency gain legitimacy.