Understandably, investor attention crypto is fascinated by Bitcoin. It has a market dominance of nearly 40% and is the most adopted and most expensive cryptocurrency in the world. However, while Bitcoin has done more than enough to bring the cryptoeconomy where it is today, in the future Ethereum it will be decisive for the evolution of the sector and the speed with which it evolves.
Ethereum as the engine of the crypto economy
Ethereum does not rely on a clear monetary vision like Bitcoin, so its popularity and structural importance are not due to its cryptocurrency (ETH). Ether is just the tip of the iceberg. What proves crucial is the multi-billion dollar economy powered by the Ethereum ecosystem and its ability to adapt to the needs of its users.
Today Ethereum is the most versatile decentralized IT platform. It has also become the focus of many use cases in the cryptocurrency economy, including everything from cross-border payments, to OTC derivatives settlement and clearing, to building autonomous governance structures and streamlining back processes. -office.
In the past, Vitalik Buterin developed Ethereum with the intention of increasing and improving Bitcoin and expanding its capabilities. Over the years it has managed to achieve much more. Today it is used to program, decentralize and trade just about anything you can think of. Furthermore, it is one of the reasons (if not the main one) why the cryptocurrency industry has captured the interest of Wall Street and has gradually gained the trust of regulators around the world.
What Ethereum has given us so far
Currently, Ethereum powers between 60 and 70% of the cryptocurrency industry. So it’s safe to say that without it, people today wouldn’t be talking about decentralized finance (DeFi).
One of the key contributions of the Ethereum network is that it allows the cryptocurrency industry to replicate and digitize conventional financial products such as lines of credit and interest. Some of the more popular projects in that field include MakerDAO, Uniswap, Aave, Compound, and others.
Furthermore, Ethereum powers stable currencies such as USDC, Tether and PAX, which many cryptocurrency investors and institutions are exposed to.
Even the NFT craze would not have been possible without Ethereum. Today, many of the more expensive NFTs and markets, such as OpenSea, are active thanks to its network.
The ecosystem also powers many other crypto-native products and services, including wallets, exchanges, trading venues, cryptocurrency newsletters, wallet management apps, decentralized insurance platforms, KYC and identity solutions, and many more. Without it, concepts such as decentralized autonomous organizations (DAOs) and smart contracts, which eliminate potential points of failure in transactions and relationships between different parties, would not have existed.
Simply put, over the years, Ethereum has established itself as the preferred environment of most niche project developers, enabling the cryptocurrency industry to grow and innovate. Furthermore, the variety of use cases and the powerful network effect complement each other to progressively multiply the number of developers using the network.
What will Ethereum give us in the future
Ethereum can provide us with the blueprint to build the crypto environment of tomorrow. In a world moving towards zero CO2 emissions, cryptocurrencies are receiving a lot of attention from almost all corners of the market. Currently, studies suggest that Bitcoin mining alone could push global warming beyond 2 ° C. Although Ethereum mining emits 11 times less CO2, it is still not a viable option when pursuing a sustainable future.
The latest series of updates to the Ethereum network, known as Eth2, replaces mining with staking, to significantly reduce computing power. As a result, Ethereum’s CO2 emissions are estimated to decrease by 99.95%. The bottom line is that such improvements will allow crypto assets to become part of the solution to the zero-emissions path, rather than the problem that prevents it.
Among the key benefits that Ethereum could give us in the long term is unlocking the era of Web 3.0, where decentralized applications allow users around the world to interact and transact without intermediaries. As a result, it can give the big tech companies a run for their money. Furthermore, it can unlock the crypto economy and make it accessible to virtually anyone around the world. In this way, humanity can tackle the problem with the non-bankable population which today exceeds 1.7 billion.
Another essential but often overlooked contribution of Ethereum is opening the niche to competitors. New projects such as Solana, Cardano and Avalanche are entering the market with blockchains with greater scalability and processing capacity. However, so far, none of them have managed to become the “Ethereum killer”. While dethroning Ethereum seems unrealistic in the future, increased competition and the natural selection principle imposed by new entrants will help grow and further develop the niche.
Ethereum will continue to be the backbone of the crypto economy
Ethereum shows no signs of slowing. Some analysts also see a potential “flip,” where ETH outstrips BTC in value. Whether or not that will happen is another discussion. The most important thing is to leave speculation aside and focus on the bigger picture.
As the wave of decentralized finance is likely to become more prevalent in the global economy and there would be a need to accommodate millions or even a billion new users, it is safe to assume that Ethereum will continue to be the market in the future. spine of the cryptoeconomy. Everything else will be just a by-product of its growing importance.
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Disclaimer: The Industry Talk section features insights from crypto industry players and is not part of the editorial content of Cryptonews.com.
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