Cryptocurrencies divide opinion. Those who know about them understand their potential, those who don’t know much, tend to spout the negative narrative: oh it’s magic internet money, it’s a ponzi scheme, it’s used to buy drugs on the darkweb etcetera.
Bitcoin is starting to infiltrate Wall Street’s knowledgeables on a personal level, and the individuals there are getting involved. The big institutions are also trickling in, but the truth is most of them won’t be interested until crypto is a much bigger asset class.
Institutions might not be investing in Bitcoin as a currency, but they are getting involved with Ethereum in many different ways. Like Bitcoin, Ethereum does have a currency: Ether (ETH), but it’s much more than a currency.
What is Ethereum?
Ethereum is an open-source, public blockchain, and decentralized application (dApp) platform. The currency (ETH) is used by people making transactions and developers wanting to build on the Ethereum network.
If you buy Ethereum, you’re actually buying ETH, and those who know about it understand its capabilities. It’s in its very early stages, but the beauty of the crypto economy, it has allowed people to invest in things like Ethereum in its early days.
Some might say this is a bad thing, as there have been many scams, and people continue to invest in such scams. But then there’s Ethereum – a technology that will become the platform for the decentralized web.
For anyone not sure about Ethereum, here are three reasons it could turn out to be an excellent investment.
*Do not take this as investment advice, and always do more research…
Ethereum Has Wider Innovation Than Bitcoin
Bitcoin is a fantastic technology, and anyone interested in it should definitely learn about it, and I personally am invested in it. However, if you compare the innovation of Bitcoin and Ethereum, then Ethereum’s technology wins hands down.
Ethereum is a Turing-complete software, which means it’s capable of running any algorithm. This allows Ethereum to run any program written in any language on the blockchain, and also processes transactions much quicker than Bitcoin.
As stated earlier, it’s a platform for dApps. These are smart contracts that are coded into the Ethereum blockchain, and the possibilities smart contracts and dApps on a decentralized platform bring is endless.
Like Internet applications of today, a variety of dApps are being created, but one of the leading sectors in dApp innovation is the gaming industry. Gaming dApps built on Ethereum are set to introduce real ownership of skins and ingame purchases.
Gamers will be able to purchase things like skins and as well as use and own them, they’ll be able to trade them, and even transfer them into different games. Imagine that: Buying a skin and using it in multiple games. This is all being worked on and will ensure Ethereum becomes the gaming platform of the decentralized web.
Ethereum Could Become The Backbone For The World’s Financial System
Bitcoin is a currency that interests many investors, but the currencies being built on the Ethereum blockchain are also growing at an unbelievable pace.
Decentralized Finance (DeFi) is a new financial system built on decentralized architecture like Ethereum, and it is negating the need for third party control like banks and transmitting companies.
It’s very early days in the DeFi space, as it is in the blockchain space, but DeFi is growing so much, and most of it is being built on Ethereum. DeFi itself has a market cap of over $1 billion, and this is just the beginning.
And the capabilities of DeFi and Ethereum itself is peaking the interest of many financial giants. With JPMorgan and Santander part of the EEA, they’re working on things like new settlements layers.
Earlier this year, a $40m bond was issued on Ethereum as part of a capital infusion into the Fatburger restaurant brand.
While $40m might be a drop in the ocean when it comes to the financial industry’s pockets, the firm that carried out the trial intends to raise $500m more by the year end.
There are securities already being issued on Ethereum smart contracts. Again, these are very early days but the tokenization of securities brings so many possibilities not just to Ethereum, but to the very securities they will be.
Enterprise Ethereum Alliance (EEA)
If anyone is still unsure about Ethereum’s potential, they just need to look into the Enterprise Ethereum Alliance (EEA).
In the alliance Ethereum has partnered with the likes of Microsoft, Intel, JPMorgan, BP, Ernst & Young to name a few, and there are over 200 more.
These giants don’t throw money away, and are leaders in their own space and are all working with Ethereum on blockchain integration.
Of course they’re interested in blockchain, it’s going to revolutionize their businesses, but think about why they chose Ethereum over other platform cryptocurrencies like EOS and Cardano, or even Bitcoin. They understand Ethereum’s smart contract capabilities.
As stated earlier, smart contracts are what dApps are using to create their applications, but I’ll explain a little more why smart contracts are peaking the intrigue of corporate giants.
Smart contracts are set to revolutionize many industries, and will save companies so much time and money that it is an inevitability that Ethereum and smart contracts will be the backbone for many industries.
It’s very early days in the Ethereum eco-system. To fulfil its promise of being the backbone of the decentralized web, Ethereum has to scale. Right now it isn’t capable of achieving the things mentioned in this article, at scale.
If it’s to be the backbone of decentralized gaming, corporate and financial industries, it needs to scale at a much faster rate. Of course, this is being worked on and although it’s taking time it will one day be ready. And when it is it will reward its early investors.
What is Ethereum worth? I can’t answer that, but I do know when it fulfils its promise, it will be worth much more.
Author: Pete Senior