Bitcoin has more than doubled in price this year alone, but it has been outperformed by its closest rival Ether, which is up over 2,300 percent.On January 1, bitcoin was trading at the day's high of $1,003.25.On Wednesday, it broke through the $2,300 barrier for the first time to hit a fresh record high of $2,377.32, according to CoinDesk, marking a year-to-date rise of 137 percent.To find out what's driving bitcoin's rally, read more here.Meanwhile, bullishness around bitcoin has stoked appetite for other cryptocurrencies.One in particular known as ether is getting traction.This represents a 2,367 percent rise year-to-date.Ether runs on an underlying technology called Ethereum, which is a different blockchain to the one that underpins bitcoin.While ether does have digital "coins" like bitcoin, companies are more focused on how the Ethereum blockchain could be used in real-world applications.Ethereum has been designed to support so-called smart contract applications.A smart contract is a computer program that can automatically execute the terms of a contract when certain conditions are met, potentially taking a lot of the human involvement out of completing a deal.

Barclays for example, have used a form of this technology to trade derivatives.How is it different to bitcoin?Firstly, Ethereum is a lot younger having only been started in 2014, whereas bitcoin began in 2009.Ethereum is also focused on smart contracts, while bitcoin is very much about payment technology.Why has ether rallied so much?While bitcoin has been getting support from certain 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.Companies involved in the launch include JPMorgan, Microsoft and Intel.On Tuesday, the EEA announced another 86 firms joined the alliance, which is adding growing legitimacy to the cryptocurrency.At the same time, the rally in bitcoin has seen investors turn to alternative digital currencies as well as attracting a broader investment base.

A year ago, over 83 percent of ether buying happened with bitcoin, according to data from CryptoCompare, showing that it was mainly crytocurrency enthusiasts interested in it.As of Wednesday, bitcoin accounted for just over 32 percent of trade while fiat currencies such as the U.S.dollar and Korean won have risen sharply."Yes the direct fiat flow options are a fleshing out of the ethereum ecosystem and show its broad appeal," Charles Hayter, CEO of CryptoCompare, told CNBC by email.Will the rally last?Not all in the market are convinced that the ether rally will last.Bitcoin trader Jason Hamilton is worried that products like Ethereum could be cloned."People are buying a specific blockchain, but the big interests are in the technology.They'll probably make their own clones and the ether tokens everyone is buying won't be used for much except trading.Who knows, though," Hamilton told CNBC via a direct message on Twitter."I don't usually trade ether.I'm afraid of that bubble bursting, but it could go on bubbling up for a long time still."

Just when you were (maybe) beginning to get a basic understanding of the digital currency bitcoin, a second-place digital currency is gaining steam and growing in value.bitcoin tucumanIt’s called ether, it is the token of a blockchain network called Ethereum, and less than one year after launching, its market cap now exceeds $1 billion.On Thursday, Ethereum hit another business milestone when Coinbase, the leading mainstream platform for buying and trading of bitcoin, added support for ether.litecoin gpu miner for windowsCoinbase customers—there are 4 million of them in 32 countries—can now easily buy and trade ether using the Coinbase web site or mobile app.But would they want to?bitcoin linux mining clientFirst they’d have to understand it.If bitcoin, which runs on a decentralized, permission-less, peer-to-peer blockchain, is still in its infancy—a point bitcoin believers love to make—then Ethereum is barely out of the womb.ethereum domain register

As the New York Times wrote in March, the network “is complicated enough that even people who know it well have trouble describing it in plain English.”Ethereum’s creator is Vitalik Buterin, a 22-year-old Russian tech-wunderkind who began working on the concept at age 19.bitcoin price rise graphA presentation Buterin made at Ethereum’s developer conference last year listed use cases such as: issuing assets; crowdfunding; domain registration; title registration; gambling; prediction markets; and the Internet of Things, among others.Ethereum is not without troubling security issues: Last month a decentralized network called The DAO, built on top of the Ethereum blockchain, was attacked, in a theft of $50 million worth of ether.bitcoin fiabilidadAfter the attack, an SEC official expressed grave concern over the network’s security.Still, many in the cryptocurrency world say Ethereum is even more exciting than bitcoin because of the ability to smore smart contracts on its network.

Many developers are already running early-stage apps on top of Ethereum, for all manner of services including blockchain payments via Slack and placing bets on which tech startups will get popular first.Coinbase had already added ether to its more formal cryptocurrency exchange site for institutional investors, GDAX, back in May.“We saw individual as well as developer interest in Ethereum rise at the end of 2015, and by the early part of 2016 our customers on GDAX were saying, ‘Give us the ability to sell ether,'” says Adam White, VP of business development and strategy for Coinbase.Bringing ether to its mainstream wallet product was the obvious next step.Coinbase adding ether (everywhere but New York) also means that all partners using the Coinbase “buy widget” can do the same.One such partner is Lawnmower, a mobile app that originally launched as a “roundup” service that invests your spare change into bitcoin, using Coinbase.Lawnmower recently changed its model to allow users to set an auto-purchase of bitcoin once a month at a set price, and it just updated its app this week to include a news hub for intel on many cryptocurrencies, including ether, litecoin, and ripple.

In other words: Lawnmower, like Coinbase, saw ether pulling into second in the crypto race.“Some of these assets recently, like ether, our users have made it clear they want to learn more about it,” says Alex Sunnarborg, Lawnmower CFO.“So we just said, ‘Let’s move as fast as we can on it.'”Lawnmower added an index that shows ether’s price over time, compares it against bitcoin, and even has the full original white paper on Ethereum.What it couldn’t add was the ability to actually buy ether.Now that Coinbase has implemented that, it can.All of the momentum for ether reflects that bitcoin will not be the only digital currency of interest.It was the first to come along, in 2009, but there is room for more.And indeed, there were more—like dogecoin, litecoin (whose inventor now works for Coinbase), and ripple—but White says, “Nothing uniquely differentiated itself until Ethereum.While bitcoin is a fantastic global transaction network, we see Ethereum offering a worldwide computational network.”Coinbase was the first bitcoin wallet to get mainstream recognition.

It was also by far the best-funded bitcoin startup until the mysterious 21 Inc.raised $116 million in a single round last year.Adding Ethereum to Coinbase, White says, “required a fresh look at how we design the platform.We wanted to keep it super simple, easy to understand, so that people like my dad, when they hear about Ethereum in the paper, and he wants to buy $100, he can go to Coinbase and it’s still a very simple process.”If the casual investor does want to dip a toe into ether, Coinbase now allows it through a bank account, credit or debit card.Ether currently trades at around $12.Coinbase expects to see “a very significant amount of interest.”—Daniel Roberts is a writer at Yahoo Finance, covering sports business and technology.Follow him on Twitter at @readDanwrite.Read more:The latest Bitcoin price hike is not all about BrexitBritish bitcoin market sent incredible signals ahead of BrexitHere’s why 21 Inc.is the most exciting bitcoin company right nowHow early bitcoin leader Coinbase is staying relevant amid the blockchain craze