There’s a new blockchain in town called Ethereum and it’s bound to change the way we build apps forever. Some say it could become the SkyNet, an un-controllable Artificial Intelligence that would take over the world. But most of us think that it’s a tool that will revolutionize the way we create software and trust each other online.
Will Ethereum Price stay high?
What is the difference between Bitcoin and Ethereum Blockchain?
The main difference between the two network, is that on Ethereum blockchain you can run code directly on the blockchain. Also, where Bitcoin only allow a transaction to be spent or unspent, a transaction can have multiple states on Ethereum and you can pass data inside your transaction.
This is a really big deal.
The first main benefits of having a program running directly on the blockchain is that you can totally trust the application since everybody can audit it. The program is run on the open and you can compile the code to make sure it run like it says it run.
The second main benefit, is that it cannot be shutdown. So if you have created a smart-contract on the blockchain and it is set to be activated by a certain event, you can be sure it will be put to action since the network is always live and cannot be shut down.
This last benefits, the fact it cannot be shutdown, is also the fear of certain person. They think that if a malevolent software would be uploaded and run, no one could ever take it down.
Why Ethereum will go mainstream if Bitcoin couldn’t?
The main reason Bitcoin is not getting the level of adoption it should be getting is because it is too technical for most people to get started. The target market for Bitcoin are regular people doing online transaction and people that are concern about their monetary sovereignty.
Also, unless you want to do oversea transfer there is no immediate application for normal people to use Bitcoin because it is still limited in its use. Not many shop accept it and even if they accept it, paypal is still more convenient for most people.
Bitcoiner have to carve little by little there place on the market. Over the past few years they succeeded but it seems to have been much slower than expected.
Why ethereum is different?
Ethereum first target market is quite different. 99% of people using Ethereum are developer and programmer. Those people are obviously very tech savy and they love new technology. Ethereum is exactly what they have been looking for ages.
Ethereum is currently mostly know from people in the cryptocurrency space but this will change once Homestead version of Ethereum is live and the network is officailly stable.(1 week from now) Put ethereum on the NY times or the Guardian, and that’s only a question of time, and it will go to the moon.
Where bitcoin shortcoming was the lack of technical ability of it’s target market, this will be the strength of Ethereum.
Imagine an army of developer downloading Ethereum nodes and running the software on their computer. They all will want to experiment with the network and create an app or two.
I believe that the only thing that could hinder growth is a too fast adoption of Ethereum by the public which could overwhelm the network in a similar way to what just happen to bitcoin.
How Ethereum can grow in the future?
I really think that Ethereum has still experienced less than 0.00001% of it’s potential growth, actually probably much less than that. Over the next few months, we should see a surge in the user base of Ethereum simply because the developer community don’t know about it just yet.
The beta version literally just got release and we already saw some big “killer apps” that could make Ethereum go mainstrem.
How the Network Effect will be instrumental in Ethereum success?
The network effect of Ethereum will be instrumental to his success. Any Dapps(Decentralize application) on the network can interact with each other to a certain level. This means that everytime a Dapps gets a new user, it add value to the other dapps on the network.
The synergy of having all those Dapps running on the same network is huge! The network effect will be gigantic and I can only imagine how fast the network will be built once this network effect start taking place.
But this success can become a problem when too many people are using the network at the same time.
What are the challenges ahead for Ethereum?
Bitcoin main problem at the moment is it’s inability to scale properly. This mean that the network slows down as more people join it. This is a big problem. Bitcoin can currently process 7 transactions per second and it would need to process 1 000 times that amount.
Currently they verify transaction by Proof of work(PoW), where computational power from hardware called miners confirm transactions. Each miner runs some hardware that the only purpose it to validate transactions.
The problem with PoW is that big mining pool can end up controlling the validation process and having to run all this hardware and use all this electricity to validate is very energy inefficient.
What is the solution to the scaling problem?
The first solution is Proof of Stake (PoS). By switching from Proof of Work to Proof of Stake, validator will instead bet money to confirm transactions. This is a whole new paradigm and it includes some game theory. This required transition will allow the network for the ultimate and final scaling step which is sharding.
Sharding means splitting the network into smaller pieces, just like creating small city. Each city will be able to communicate with each other, but it will be much easier to communicate within your own city. So choosing where to position your Dapps on the network will be key.
This is the next big update that Ethereum network will go through and it is not schedule before next year. Once this is done, it will allow to scale to an unlimited level.
There is the possibility after, that we could increase the processing power of the network. We could have very complicated computation run on the network and maybe have a super-powerful world computer.
There is a lot of interesting challenges coming up and I fully trust the Ethereum dev team to keep on delivering just like they did so far.
What is in the future for Ethereum?
The future is rather shiny for Ethereum. Vitalik Buterin, the 22 years old prodigy at the head of the project and his team, are revolutionizing the cryptocurrency space.
Vboost, the venture capitalist firm that has been exclusively investing millions of dollars in Bitcoin start-up for the past 2 years recently decided to include Ethereum start-up to their portfolio.
The main reason they decided to do this is because the start-up they were investing in where switching from Bitcoin blockchain to Ethereum blockchain!
They also say that they trust the people at the head of the Ethereum project. This is also one reason why I invested in Ethereum.
I want to be involve with Ethereum, what can I do?
The first thing you can do is download your Ethereum wallet here which will also act as a node on the network.
Once you have it, you can start building Dapps or create your own crypto-currency! Coding is much easier than people think and once you learn it, you’ll be able to audit those smart-contracts on the blockchain.
Don’t be left behind and get started with Ethereum. It is the computer of the future.
Do you already use Ethereum or do you have any question? Let me know in the comment below!