The Smart-Contracts Cryptocurrency
Ethereum is one of the world’s largest cryptocurrencies by market cap. It is second only to Bitcoin. Much like Bitcoin, Ethereum is a cryptocurrency with a singular blockchain with miners competing for mining rewards. The key differences between the two is that Bitcoin is referred to as “digital gold” while Ethereum is referred to as “digital oil”.
The Ethereum network requires the use of “ETH” as fuel for network operations. Ethereum is capable of smart-contracts, automated contracts that can fulfill conditions without human intervention. Smart-contracts are the reason for the boom in NFTs (non-fungible tokens) and DeFi (decentralized finance). It is also why Ethereum is capable of deploying decentralized exchanges (think RobinHood without a central office and where you always control your money). Uniswap, a popular decentralized exchange recently has traded more daily volume than one of the world’s most popular crypto-exchanges, Coinbase.
As mentioned, NFTs are one of the latest trends in the cryptocurrency space. While many artists are using NFTs as an opportunity to promote their work, regular businesses have very strong reasons to look at NFTs:
- A tokenized ticket system for events
- Releasing digital merch such as trading cards, game items
- Subscription badges
- Implementing a data-transparent transactional system for your customers
In addition to decentralized exchanges, Ethereum is also capable of decentralized lending, borrowing, and leveraged trading. Taking advantage of DeFi is recommended for businesses dipping their toes into cryptocurrency – it allows a pathway to participate in this space without engaging in assets as volatile as Bitcoin & Ethereum. You can trade your capital for USD-pegged “stablecoins” and earn higher interest rates than traditional financial instruments. One of the most popular DeFi platforms currently is Uniswap, with over $122B in all-time volume.
Currently, Ethereum is in the middle of transitioning to a new upgrade. This ETH 2.0 upgrade is meant to lower transaction fees and raise scalability, meaning it will be more appealing to trade Ethereum for goods and services, which is necessary for businesses to adopt the cryptocurrency. Ethereum has many eyes on it currently, and this upgrade provides an optimistic look for its robustness.
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