Introduced in 2013 by a Bitcoin programmer named Vitalik Buterin, Ethereum is an open-source blockchain platform that enables developers to build and deploy decentralized applications. Here’s why investors see this as an attractive proposition.
If you have even the slightest interest in virtual money, then you would know about Bitcoin—an electronic, peer-to-peer, decentralized, distributed cash system. A digital asset in many ways, Bitcoin has taken the internet by storm. More of a virtual currency and less of coin, Bitcoin possesses power far beyond the dollar because it is not a physical currency and the dollar is not a payment network.
So, where does Ethereum fit in all of this? One of the biggest cryptocurrency assets in crypto exchanges and markets today, Ethereum is well-known not because it has a significant amount of crowded money, but because it is similar to Bitcoin—the most popular and highly sought-after crypto asset out there.
However, a blockchain platform, Ethereum is slowly starting to steal the limelight from bitcoin or at least that is what the current investment trend in the blockchain technology indicates. So, why is Ethereum popular among businesses these days?
The reason why businesses are so interested in Ethereum today is that all parties involved in a transaction or agreement can use smart contracts on the Ethereum blockchain platform to enclose all the processes and rules of transactions.
Once all transactions or agreements are successfully executed, the smart contract immediately carries out actions and initiates compliance checks, which are based on the rules defined and encoded in the smart contract. To come up with better blockchain solutions, all these processes are carefully implemented during the development phase of the Ethereum blockchain platform.
Bitcoin vs. Ethereum
This is a counter argument to what was said above—Ethereum is popular because of its similarity to Bitcoin. One thing that gives Ethereum an edge over its more established and popular counterpartis that it isn’t purely a cryptocurrency like Bitcoin. The Ethereum blockchain platform allows for smart contracts which automictically process transactions when both parties in the transaction have fulfilled their responsibilities in the contract.
Ether—the native cryptocurrency of Ethereum powers its transactions. Just like Bitcoin, Ether can be bought and sold for real-world money via a variety of online exchanges. Generally, Ether trades for a lot less than Bitcoin. However, the newfound support from major companies and banking institutions may skyrocket Ether’s value very soon.
The Real-World Use Cases of Ethereum
The prospect of Ethereum blockchain technology looks great in theory but are they any real use cases that serve as a reference for its potential? Ethereum can be used to decentralize virtually any service that is currently centralized. Think industries currently controlled by an intermediary: banking, payments, insurance, and real estate are the obvious ones.
However, there are other sectors that blockchain can be used for as well. These include supply chain management, forecasting, music sharing, IoT applications, music sharing and voting systems.
Today, Ethereum is being used in their blockchain applications by many big names across various industries. Example of this is the recently launched Microsoft Azure—a blockchain-as-a-service platform that uses several distributed ledgers in its service offering, including Ethereum. In fact, more than ten banks including Barclays, HSBC, and UBS used the Ethereum protocol via Azure to test out a bank-to-bank platform.
With this simulation, the banks could settle transactions to each other almost instantaneously, compared to several days or weeks needed under current systems.Advocates of the blockchain technology predict that in the next couple of years, blockchain platforms like Ethereum will be commercially used by banks to transfer real assets.
The Increasing Popularity of Ethereum Wallets
If you want to store your Ether or private keys in a secure way, then you will need a place where you can do that. This where Ethereum ‘wallets’ come in. Since it means losing your Ether forever, losing your private key is a much bigger deal than misplacing a password.
While verification from intermediaries is no longer required, you have no help desk to turn to recover your secret key.However, there is some good news—you can choose from a variety of Ethereum wallets to store your cryptocurrency: desktop wallets, web wallets, hardware wallets, and paper wallets. You can choose a wallet depending on your preferences for convenience and security.
The Role of Enterprise Ethereum Alliance
Another thing attracting investors to Ethereum is the Enterprise Ethereum Alliance—one of the biggest entities supporting the growth of Ethereum. The reason for establishing this alliance is to bring together some of the biggest names in the banking and technology sector to come up with innovative new uses for Ethereum and the blockchain technology on which the crypto asset is based.
Some of the tech companies that are part of the alliance include Samsung, Intel, and Microsoft. The banking institutions supporting the alliance are Mastercard, Santander, ING, JP Morgan, amongst others. A variety of cutting-edge startups are also involved in the Enterprise Ethereum Alliance. The main aim of the alliance is to make Ethereum more accessible and practical for a wide-range of real-world applications. Companies making up the alliance are actively engaged in initiatives directed towards helping the Ethereum blockchain platform and cryptocurrency realize its true potential.
While it is still early days for the blockchain technology and there will be more challenges to overcome, Ethereum can be considered as a truly transformational platform. With so many applications in the works, we can begin to wonder about the unimagined possibilities that await. If you want to know about the latest development in Ethereum blockchain technology, then get in touch with us today!
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