The Magic of Ethereum, or lack of

Lets chat about "Ethereum" as as protocol and its cryptocurrency "Ether".

This week a good friend of mine sent me an invitation to join the social media application “Clubhouse” an audio-chat social networking site. I have been hearing about this application for a while now, but was very torn about opening yet another social media app. I honestly, do not have the time or energy for so many of them anymore. My friend insisted that I join Clubhouse and mentioned that it is, by far, the best digital networking tool that he currently has in his arsenal.

Obviously, I had to join, especially since my friend was hosting a room and wanted me to participate in the conversation.

Since joining, I have been in dozens of rooms and honestly find it quite interesting to hear people from different parts of the world talk about their ideas, dreams, careers, and their take on the present state of the world, especially in the middle of this pandemic which has stripped us of our social and our face to face experiences.

Last night, I logged on to clubhouse, and joined a Bitcoin group chat (there are hundreds of them there, especially since Bitcoin’s price explosion) and was quite interesting to hear about how maximalist certain people have become. The conversation was pretty much about how great Bitcoin was and how all the other “shitcoins” are more comparable to a scam that to cryptocurrencies. Someone even talk about the lack of use for Ethereum as a protocol and how it would (should) disappear any moment now. I had to say that I was surprised and appalled. I do agree that most of the almost nice thousand cryptocurrencies currently in circulation are worthless, but you do have a few protocols (and counting) that are quite revolutionary.

Ethereum is defined as a “Decentralized, open-source blockchain featuring smart contract functionality. Ether is the native cryptocurrency of the platform. It is the second-largest cryptocurrency by market capitalization, after Bitcoin. Ethereum is the most actively used blockchain.”

Vitalik Buterin is the founder of the Ethereum protocol and to this day has a lot of control over the direction of the technology, so I do understand that we have to question how decentralized Ethereum really is. Also, Ether’s value ($1942.23 at publishing time), besides being attached to its supply and demand, is also relative to how widespread and how well the technology performs. So “Ether” may be in between a true cryptocurrency and the idea of shares in a company that trades in the stock market. But one thing is for sure, Ethereum as a platform is extremely useful, powerful, and thousands of companies are building blockchains on top of their platform.

“A blockchain, originally block chain, is a growing list of records, called blocks, that are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. By design, a blockchain is resistant to modification of its data.”

• Amazon web services (AWS), the largest cloud server service in the market, offers a Blockchain capability built on top of Ethereum. I do not think that a company with the size and reputation of Amazon would take a gamble offering a service from a third party platform that was dubious or not stable enough.

• According to the crypto app tracker, State of the Dapps, there are over 3,000 decentralized apps (also known as “dapps”) currently running on the Ethereum blockchain.

• Many of the top Ethereum projects are focused on decentralized finance, or DeFi. DeFi aims to expand the utility of cryptocurrencies from day-to-day transactions to more complex financial use cases, such as loans and derivatives.

• Ethereum is the go-to platform to build “Smart Contracts”. A smart contract is a computer program or a transaction protocol which is intended to automatically execute, control or document legally relevant events and actions according to the terms of a contract or an agreement

As you can see from the list above, there are thousands of projects that are built on top of this platform that are here to stay, and the list goes on… Ethereum may not be as decentralized or as democratic as Bitcoin, but Bitcoin was created with the purpose to be a “store of value” and not as a platform to be built on top of. In the end, Ethereum may become one of the main protocols responsible for the next phase of the internet, the future of the internet. And for that and many reasons, Ethereum and Bitcoin should not be compared at all.

Would love to hear your comments and opinions on this and other related matters.

So long…