Ethereum has come a long way since its launch exactly six years ago. The crypto giant recently surpassed Bitcoin in the total number of active daily addresses, and that momentum shows no signs of slowing as the network continues to power key DeFi and NFT trends.
Now, with major network upgrades coming down the line with Ethereum 2.0, could Ethereum flip Bitcoin as the world’s number one cryptocurrency?
Ethereum has always had different ambitions from other blockchains such as Bitcoin. Its beginnings can be traced to the first whitepaper published in 2013 by its co-founder Vitalik Buterin. To fund its development, a crowdsale was held in 2014 where the founders’ vision managed to raise more than $18 million.
But what was and still is the core vision? How is Ethereum different from Bitcoin?
While Bitcoin was designed to solve the problem of transferring money between different entities, Ethereum was envisioned as a platform that goes beyond financial use cases. Ethereum was designed to be a world computer that can run anything you can imagine through its smart contracts. And because Ethereum is permissionless, anyone can participate in it without approval and censorship.
Besides the normal growing pains that every platform experiences, Ethereum’s main issue is the same issue bothering Bitcoin – scalability. Currently transactions can be costly, which significantly limits adoption of technology, regardless of how good it actually is.
To solve the problem of scalability, work on Ethereum 2.0 started in 2019. Ethereum 2.0 (codenamed Serenity) will bring changes to the core consensus mechanism (migration from Proof of Work to Proof of Stake) that will, alongside other optimisations, bring significantly improved transaction speed and decrease costs.
While mass adoption of blockchain and crypto is still in its early stages, Ethereum is positioning itself as a leader in this new decentralized world. And the most exciting part is that we are not only passive observers but are actively participating and pushing adoption of technology and paradigms that have the potential to change the world we live in.
What Ethereum has done is look at something that already exists (Bitcoin) and made it better. It has an extremely vibrant developer community and that means that the ecosystem is growing at astonishing speed. Just look at the whole DeFi space that has grown on Ethereum. The thought that we have a system that allows people to lend and borrow without the intermediary of third parties is mind blowing – and it wouldn’t have been possible without the Ethereum network.
Looking ahead, the focus will be on the optimisations needed to make everything faster and cheaper – the missing link in mass adoption.
I do believe Ethereum will be the backbone of new decentralized infrastructure – the new paradigm shift to web 3.0, which will give control back to people.
Tim Šabanov is Chief Technology Officer at Zumo.