For those who are new to cryptocurrencies (or virtual currencies) it is sort of like learning about pop for the first time as a kid.
You obviously hear about Pepsi and Coca Cola, right?
Well, then you grow to be an even bigger kid. You find yourself interested in everything tech related. Of course, you hear about Bitcoin a fair bit, and by now, you have probably heard about Ethereum too.
We’re eight years past the creation point of Bitcoin, and the virtual currency generally trades with a market cap around $10 billion.
A big reason for this is because of the ‘block reward halving’ that took place this summer. This resulted in 50 percent fewer coins being produced daily, stimulating new interest in the crypto world.
Enter Ethereum – The Blockchain for Apps
Ethereum came into the spotlight in 2015 after receiving over $5 million in investments towards their initial coin offering (ICO). Since then, Bitcoin has become popular due to many other ICOs being crowdfunded with bitcoins.
However, this technology has a key advantage over Bitcoin, and that’s the ability to create applications from within the Ethereum network. Right now, Bitcoin is merely a solid blockchain while Ethereum is a platform for developers too.
The ability to develop such applications does come at the cost of having to learn their Solidity programming language. However, doing so opens you to a lot of crowdfunding support; the first invested Dapp, Augur (a predictions market platform), raised over $5 million in funds.
If the Augur example isn’t enough, you also have Slock.it, which allows anyone to rent anything without the need for a middle person. They received $18.9 million in crowdfunding.
Plus, there’s the DAO which, while it turned out a bust, pulled $168 million in investments.
How Could Ethereum Grow? Cool Dapp Ideas …
The growth of Ethereum comes down to the developments created within it. There are many concepts floating around that could be real game-changers.
A great example, found in this hypothetical post, suggests Ethereum could power a decentralized freelancer marketplace platform.
This could compete strongly with Upwork.com, which is the dominant freelancer site; Upwork is the result of a rebranding from oDesk, which occurred shortly after they merged with eLance a few years ago.
They charge up to 20 percent on transactions to the freelancer alone, so there’s a LOT to gain with such an application.
The Internet of Things by Ethereum
Another idea is that Ethereum will power the Internet of Things (IoT), which could become a billion dollar industry if it really takes off.
IBM made a huge announcement at the start of 2015 when they declared blockchains to be at the forefront of their IoT initiatives. They (and Samsung) also announced Ethereum would be in charge of handling smart contracts for their IoT initiatives.
This makes sense, especially as Dapps would be able to easily communicate with each other anyway. The new developments that come will be easier to integrate with the rest of the network as a result.
For true innovation, Ethereum powering the IoT could be the next logical step.
Is It Really Bitcoin vs. Ethereum?
Bitcoin is the giant and Ethereum just seems like the ‘elephant in the room’ at the moment. The idea that you can develop applications within the coin’s network is fascinating. But, Counterparty is working on a way for smart contracts to be issued through the Bitcoin blockchain. Thus, there would be less value in Ethereum over Bitcoin.
Ethereum already has the community effect going and very dedicated developers working hard to make everything perfect. You can’t expect hardened competition to stop them from bettering themselves. But it’s not even a concern to have because, in the end, there is room for both technologies to grow exponentially.