Ethereum was the invention of Vitalik Buterin. He introduced this open-source blockchain platform in a 2013 white paper. Vitalik Buterin, who’s a Bitcoin programmer, wanted to expand the use of cryptocurrency applications. And thus, Ethereum’s blockchain was introduced in July 2015 which seeks to incorporate the use of smart contracts to facilitate the transactions on its platform.
Firstly, let’s understand the blockchain technology. In a nutshell, Blockchain refers to a transforming technology. It utilizes a decentralized ledger to manage a sequential, chronological record of transactions and events. Given its open-source nature and distributed database, not only it leaves no single point of failure (making it less vulnerable to hacks and cyber attacks) but democratizes ownership transactions and records (everyone on the network can go through transaction details, so it’s tough to alter records) as well. Also, it can maintain the anonymity of users.
With Ethereum’s blockchain, any centralized service can be made decentralized including the industries controlled by intermediaries: payments, banking, insurance, real estate, etc. are some of the potential use cases of the Ethereum-based blockchain. However, it can be applied to enhance the voting landscape, IoT applications, digital media rights, forecasting and supply chain management around the globe as well.
In fact, many big names across various industries are looking to adopt Ethereum in their blockchain applications. The new name is Microsoft’s Azure. It’s a blockchain-as-a-service platform. It uses many distributed databases in its service offerings which include Ethereum as well. As a matter of fact, in January 2016, eleven banks including, UBS, Barclays and HSBC decided to incorporate the use of Ethereum protocol using Azure to analyze a bank-to-bank platform; this imitation of the process allowed instantaneous transactions between banks, as compared to current systems where processes take up to several days or weeks. Supporters even claim that blockchain technology may be commercially used by global banks to execute the transferring of real assets in the coming days.
Trust and understanding are two biggest hindrances to blockchain’s mainstream adoption. And for Ethereum to become the most preferred platform for blockchain, it will have to focus on network effects.
Global adoption will be potent. Because of its decentralized protocol, Ethereum’s transactions and payment systems aren’t restricted to region-specific compliance like many other payment systems, thus, allowing for mass adoption and usage globally. Having said that, Ethereum must leverage this to expand its reach to a prominent mass of adopters more quickly.
Ethereum is one of the biggest and trusted name in blockchain platform technology. Surely, it has got a competitive edge over competitors in being one of the most trusted blockchain platforms. And we know that ‘trust’ will be the key thing for blockchain’s worldwide adoption.
Due to its open-source nature, Ethereum can intermittently update its protocol based on the latest blockchain advancement in the market. This allows for the flexibility if the blockchain market is experiencing some changing tides.
Market liquidity is a must. During payments and transactions, market liquidity is the key factor that spins the flywheel to get demand and supply onto the platform. So, if Ethereum doesn’t fail in creating critical mass in market liquidity, it will be emerging as the most dominant technology in blockchain transactions.