What Is Ethereum And How Does It Work?

What Is Ethereum And How Does It Work?

The Ethereum network can also be used to store data and run decentralized applications. Rather than hosting software on a server owned and operated by Google or Amazon, where the one company controls the data, people can host applications on the Ethereum blockchain. This gives users control over their data and they have open use of the app as there’s no central authority managing everything.

Perhaps one of the most intriguing use cases involving Ether and Ethereum are self-executing contracts, or so-called smart contracts. Like any other contract, two parties make an agreement about the delivery of goods or services in the future. Unlike conventional contracts, lawyers aren’t necessary: The parties code the contract on the Ethereum blockchain, and once the conditions of the contract are met, it self-executes and delivers Ether to the appropriate party.

Ethereum vs Bitcoin

Bitcoin’s primary use is as a virtual currency and store of value. Ether also works as a virtual currency and store of value, but the decentralized Ethereum network makes it possible to create and run applications, smart contracts and other transactions on the network. Bitcoin doesn’t offer these functions. It’s only used as a currency and store of value.

Ethereum Price Analysis: 27 March

The ETH/USD pair moved hand in hand with the BTC/USD pair in the markets, a correlation that has been rising since early March, and now had a value of 0.78, denoting a strong correlation. ETH/BTC pair was trading at a level of support. Ethereum simply must keep pace with Bitcoin in order to recover toward $2000 in the coming weeks.

Ethereum 12-hour chart

On the charts, ETH formed a short-term range (blue) from $1727 to $1853 for a time period of just over two weeks. ETH was forced to drop beneath this range following strong selling pressure at the same time when Bitcoin plunged from $57.8k to $53.8k. It is a fact that correlation was on the rise, as ETH followed BTC in the markets.

Two different sets of Fibonacci Retracement levels were plotted for ETH for different moves of Ether, and their confluence highlighted some areas of importance for Ether.

A rejection at the $2040 mark in mid-February was followed by an attempt at recovery, but this recovery halted at $1920. This makes the $1900 area significant as a supply zone, while the $1690-$1720 will also offer resistance to price.

Technical indicators had a bearish leaning, and the bounce off $1550 has flipped momentum to bullish in the shorter timeframes. The lack of buyers was an obstacle to ETH recovery.

Flipping the $1720 area to support would be an opportunity to open long positions.

Reasoning

OBV was in a steady downtrend, while RSI tested neutral 50 as resistance. Stochastic RSI was climbing out of the oversold territory, but momentum was still in bearish hands on the 12-hour chart.

$1720 is a critical level in the coming days. If buying volume drives prices higher, the $1690-$1720 region would present a buying opportunity.

Conclusion

A revisit to $1550 or a flip of the $1700 area would present an opportunity to buy Ether, but at the time of writing momentum leaned in favor of bears.

Venture-Backed Ethereum Project Optimism Delays Launch

Bloomberg

(Bloomberg) – Tucked between the Gulf of Oman and a craggy mountain range, the dusty port Fujairah isn’t an obvious base from which to try and revolutionize the Middle East’s oil markets.But on Monday, when Abu Dhabi begins selling futures contracts for its oil and then shipping the barrels from Fujairah, it will mark an aggressive shift by the emirate. It hopes to change the way nearly one-fifth of the world’s crude is priced.Persian Gulf states pump nearly 20 million barrels of oil a day and Abu Dhabi wants the futures for its flagship Murban grade to become the region’s main benchmark.The Gulf’s biggest producers – including Saudi Arabia, Iraq and the United Arab Emirates, of which Abu Dhabi is the capital – have traditionally priced their barrels based on benchmarks from other regions. They’ve mostly sold their crude directly to refiners or international companies with stakes in their fields. Crucially, they’ve prevented those customers from re-selling the oil and benefiting from arbitrage opportunities that exist in energy markets.Now, Abu Dhabi’s removing those curbs with the aim of opening up its oil to financial as well as physical traders. Investors globally are clamoring for commodities because of their high yields relative to other assets and to protect themselves against any rise in inflation.Once sold on an exchange, Murban will be sent by pipeline to Fujairah, where Abu Dhabi’s desert fields physically connect with global markets.“If successful – and I think the chances are good – Murban futures could be a pivotal moment for Middle East crude pricing,” said Vandana Hari, founder of Singapore-based Vanda Insights, which provides oil analysis. If “a sizable chunk of Middle Eastern crude trades freely in the spot market,” that could push other regional producers to follow Abu Dhabi’s lead, she said.Storage CavernsTo help its cause, Abu Dhabi National Oil Co., the state energy firm, is spending around $900 million to build 40 million barrels of storage space in caverns beneath Fujairah’s mountains. That, and tanks Adnoc already has at the port, will ensure there’s plenty of Murban on hand to manage any future supply disruptions, Khaled Salmeen, the company’s head of marketing and trading, told reporters this month.Adnoc can pump about 2 million barrels a day of Murban and has pledged to provide the exchange with half that amount over the next year – in line with or greater than the supply of today’s major oil benchmarks such as Brent and West Texas Intermediate.Liquidity’s “critical to the whole equation,” said Chris Bake, a director at Vitol Group, the largest independent oil trader, which is backing the exchange.Creating a new benchmark will hardly be easy. Oil traders dislike change, especially when they believe markets already do a good job matching supply and demand. S&P Global Platts caused uproar this year after announcing it would overhaul Dated Brent, the world’s main crude price. It was forced to shelve the plan indefinitely.Murban will also face competition regionally. Platts publishes price assessments for Dubai oil and the Dubai Mercantile Exchange trades futures for Omani crude. Both act as benchmarks for Middle Eastern shipments to Asia.Enter GoldmanThe benefits from trading Murban, a crude first exported in 1963, are worth the effort, according to Sultan Al Jaber, Adnoc’s chief executive officer. “Price transparency will allow our customers to better hedge and manage their market risks,” he wrote Sunday in The National, a local newspaper.Abu Dhabi says the combination of high supply, easy access to oil-consuming markets from Fujairah and the absence of trading restrictions will attract plenty of buyers to its exchange. Philippe Khoury, a former HSBC Holdings Plc energy banker who Adnoc hired in 2018 to build its trading operations, said Murban may even compete with Brent and WTI.The futures platform will be run by Atlanta-based Intercontinental Exchange Inc. and called ICE Futures Abu Dhabi. Last week, ICE approved Goldman Sachs Group Inc., Citigroup Inc. and 22 other banks and brokers as exchange members.Wider AmbitionAdnoc’s plan underscores the UAE’s wider ambition to monetize its hydrocarbon resources faster in case oil demand starts shrinking with the global shift to greener energy. The country aims to increase output capacity from about 4 million barrels a day now to 5 million by 2030, which would make it OPEC’s biggest producer after Saudi Arabia.The Murban exchange and the capacity boost could raise tension within the Organization of Petroleum Exporting Countries, according to Hari of Vanda Insights. The Gulf states dominate the cartel and tend to prize unity. They also began unprecedented production cuts last year to bolster prices as the coronavirus pandemic spread.Still, the UAE says Murban futures won’t affect OPEC or its ability to stabilize oil prices.“We definitely hope” other regional producers adopt Murban as a benchmark for their own crude, Adnoc’s Khoury said this month at the Fujairah Bunkering & Fuel Oil Forum.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.