The past weeks have been harsh on the price of Ether, and public concern has been mounting over the future of the currency. Ethereum hype seems to be tied directly to the value of Ether, but where does Ethereum’s advantage truly lie in such a Bitcoin-centric world?
Indeed, Ethereum continues to drastically underperform Bitcoin, currently sitting at below 8% of the crypto market. Bitcoin’s present dominance of 70% is expected to continue to climb, shutting out the second-largest crypto from the transactional market.
The Technology Behind Ethereum
What all those concerned over the future of Ethereum seem to forget is that ETH was never intended to be a standalone currency. At its roots, Ethereum was released in 2015 as part of “Blockchain 2.0”, where blockchain was recognized not only for its monetary applications, but for the decentralization of other assets it made possible. At its base, Ethereum is wholly different from Bitcoin, with plenty more functionality that make entire aspects of the crypto market possible.
Ethereum still stands at the largest open-ended, decentralized crypto that supports Smart Contracts and Distributed Applications to be created and ran without third party interference. Ethereum also comes bundled with a fully Turing-complete programming language on the blockchain, allowing developers to create apps directly on the decentralized network.
At its core, Ethereum exists to act as a sort of worldwide supercomputer, which would divert computing tasks to miners and allow virtually anyone to host a service upon its infrastructure. The nature of the Ethereum blockchain also allows for data storage, made easier by the chain’s unlimited block size.
The most common implementation of this service is through coin transactions powered through Ether “gas”, which serves as an incentive to miners in the Ethereum network to process the transaction for altcoins such as Coinbase’s USDCoin and others.
Another famous implementation of Ethereum technology was the formerly popular game CryptoKitties, which ran on the Ethereum blockchain. However, the intense popularity of the game combined with the less mature Ethereum network slowed down other Ethereum transactions considerably, leading game creators to pull the plug on generating new kitties.
Ethereum’s potential for data storage through the blockchain may additionally prove useful in the future. Indicators such as IBM’s recent patent application for a blockchain storage-based web browser show that interest in distributed information gathering and applications revoking power from corporations is mounting. This interest is sure to only grow, as the recent unveil of Facebook’s Libra coin increases public skepticism of the amount of data corporations have on their financial activities. Those concerned with corporate data harvesting often find themselves in the comforting arms of open source, decentralized technologies such as blockchain technologies which allow them the privacy they so desire.
Despite the increasing concern at the decreasing cost of Ethereum, the support given by the crypto for new ICOs and general blockchain usage has certainly earned Ethereum a place in the future of blockchain technologies; however, whether that seat is at the table of currencies or distributed apps is anyone’s guess. Many hope for a future with decentralized applications becoming the norm, some of those applications inevitably to be powered by Ethereum themselves.
And as for the price of Ether over time, some analysts still seem to have their head in the clouds; as of this week, the majority of Crypto Twitter is holding out for another rally above $1000 USD, eventually.