Digital Friday >>> Is the Next Internet Going to Run on Ethereum?
Picture Credit: Executium
Cryptocurrencies have grown exponentially in both value and relevance through the past few years, and currently the most prominent of these cryptocurrencies has been Bitcoin. Today a single Bitcoin is worth more than $47,000 (price of Bitcoin as of December 17th 2021). However, Bitcoin isn’t the only cryptocurrency that is thriving because Ethereum is fast on its heels.
Ethereum is an open software platform which is based on blockchain technology, and it enables developers to both build and deploy decentralised applications. So, it’s important to note that although Bitcoin and Ethereum are similar in some ways, they also have their own distinctive purposes. Bitcoin for example enables a peer-to-peer online payment system which facilitates safe and fast online transactions. Ethereum on the other hand focuses on running code for any decentralised application that’s running on its network. On the Ethereum blockchain “Ether” is the official cryptocurrency which fuels the network.
Ethereum is quickly growing in popularity as developers turn to the technology to create finance projects and digital tokens like NFTs (Non-Fungible Tokens). As the exponential growth in popularity for the Ethereum platform continues, more and more developers are starting to use the software. “60 to 70% of the industry runs on Ethereum. It’s very sticky” comments Sandeep Nailwal, the co-founder of Polygon.
Another key functionality of Ethereum is Smart Contracts. This is a phrase used to describe an Ethereum application which can facilitate the exchange of money, content, shares or anything of value in exchange for Ether. This is primarily how NFT’s are exchanged and bought.
However, like many other cryptocurrencies, the value of Ether is still highly volatile. Unlike Bitcoin, Ethereum doesn’t have a ceiling to the number of tokens that can be in circulation, but Ethereum’s founder Vitalik Buterin commented that Ethereum can adapt to whatever needs that its users have for it.
Ethereum does have its drawbacks though. For one, it can only facilitate around 15 transactions per second, and this has allowed multiple other blockchains with greater processing ability to spring up and challenge Ethereum. Avalanche, Solana and Cardano are just a few examples of blockchains with greater processing capacity, Avalanche even raised $230 million via a recent sale of tokens. Whilst these new blockchains are slowly growing in popularity, Ethereum’s early lead into smart contracts has given them an immense lead into the market as well.
Although Bitcoin currently holds a firm grasp over the cryptocurrencies market, Ethereum is also a major player that simply cannot be ignored going forward.
December 17th 2021 | 7:20 PM