What is the ETH/EUR pair?
The ETH/EUR pair is composed of the crypto network Ethereum’s ether cryptocurrency and the Eurozone’s euro. Symbolised by their respective abbreviations, ETH for ether and EUR for euro, the pair is one of the most modern and represents the value of the cryptocurrency compared to a real-world (fiat) currency.
Ethereum, based on blockchain technology, is an open-source public crypto network. The network facilitates smart contracts, enables distributed applications (DApps), and the trading of its native cryptocurrency – ether. Ether is described as the ‘crypto-fuel’ used to power the platform. Ethereum has the second largest market cap after Bitcoin (Bitcoin $150 billion, Ethereum $66 billion – May 2018).
Unlike Bitcoin, the Ethereum network uses a proof of stake system to verify transactions, as opposed to Bitcoin’s proof of work. Said to be a more diplomatic format, and cost effective, it allows anyone to take part instead of just crypto geniuses. The primary difference in these two verification systems is the block reward. When using proof of work the miner receives a block reward, but with proof of stake, only the transaction fee is given, and not the block itself.
The platform was developed by Vitalik Buterin, the company’s cofounder, in 2011. In establishing Ethereum, he wanted to address the issues of the Bitcoin network, mainly that its approaches were individualistic and create a more multifunctional blockchain solution.
3 years later, in 2014, the company underwent a crowdsourcing campaign, selling ether (Ethereum’s cryptocurrency), to raise more than $18million, necessary to launch the company into the public sphere the following year in 2015.
All about the euro
The euro is the official currency of the European Union (EU), it is used by 19 of the 28 European Union countries, known as the Eurozone. Symbolised by the sign €, the currency was introduced on 1 January 1999 under the management of the European Central Bank (ECB). However, it was not until three years later, in 2002, that the currencies banknotes and coins came into common use across Europe.
On 1 January 2002, an initial 12 EU countries adopted the euro, replacing their national currencies. These countries were: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain.
Today, a total of 19 EU member states hold the euro as their national currency, with the remainder, excluding the UK, committing to do so in the future. Additionally, a number of non-euro states have fixed their currencies to the value of the euro, these include the Danish krone, the Comorian franc, and the Moroccan dirham.
The euro is the second most traded currency, in terms of volume, after the USD, with the Eurozone’s economy ranked second globally.
What influences the pair?
One of the key factors affecting the rate of ETH/EUR is news relating to the currencies. Although the euro is well-established, it is still subject to influence from news about unemployment rates and other key EU data. Meanwhile, ether, as a cryptocurrency has found itself at the centre of security scandals and tales of crypto theft. Despite this, the network has continued in popularity, second only to Bitcoin.
Additionally, cryptocurrency regulations being developed across the world could play a major factor in its success and subsequent value. Stronger restrictions could prove problematic for the currency; however, the implementation of such structures could conversely encourage more investors due to a perceived level of security.
If you want to speculate on ETH/EUR, keep a close eye on monetary reports and other financial news from the European Central Bank (ECB). Additionally, any changes to cryptocurrency regulation imposes by the ECB could be set to rock the pair. However, as of February 2018, the ECB have stated crypto regulation is not their top priority.
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