Since the beginning of 2016, anyone with a pulse on the digital currency industry has watched with bated breath the smart contracting platform Ethereum rise to meteoric highs. As a relatively new development utilizing bitcoin technology, Ethereum aims to implement a globally decentralized, unownable, digital computer for executing peer-to-peer contracts. Such an innovation could eliminate censorship, fraud, and the role of the third party in online collaboration.
Unlocking The Ethereum Virtual Machine
What differentiates Ethereum from bitcoin is that it doesn’t stand first to be a payment system, but rather a computing platform. The cryptocurrency of Ethereum, ether, acts as a sort of fuel to power the engine of this computing platform. Ether is consumed by miners for accessing resources of the network. The more ether a user holds, the more “gas” they can pump into the computational engine of the Ethereum virtual machine.
Ethereum is a world computer you can’t shut down and you can’t turn off. This combination of cryptographic architecture and Turing completeness, could enable entirely new industries to spawn, where traditional business models occupying the role of middleman, will increasingly feel the pressure to innovate or die.
One of the defining features of the 21st century corporation is populating the role of the employee with machines rather than humans. Bitcoin is one of the first models of such a corporation. The miners of the bitcoin network can be seen as employees rather than as humans were in the traditional corporate model.
Ethereum takes this development one step further. Interestingly, the role of the customer (which is currently populated by humans) stands to be dominated by machine function as smart contracting systems enable end-to-end payments without requiring a human initiator. What Ethereum will help facilitate is an economy of interconnected devices where machines can transmit money and data in a manner which dwarfs the efficiency of human input. Businesses which overlook this trend, will pay dearly due to new supply channels which disintermediate the old world’s necessary third parties.
In a business landscape where corporations run autonomously, analog money will continue to be dumped in favor of a fully digitized money unit. The consumer of today has come to expect instantaneous, global, and friction-free payments. Nearly 50% of millennials are anticipating tech startups to disrupt the legacy banking sector, and although there remains much progress to be made, advances in cryptocurrency (and smart contracting) will enable a velocity of money which moves toward the esteemed ideal of conducting business at the speed of thought.
Ethereum today is where bitcoin was in 2010 – raw infrastructure, lack of developers, and plenty of skeptics. Competitors, such as Rootstock, add legitimacy to the use case Ethereum is attempting to bring to market. From trustless crowdsales to democratic organizations, smart contracting platforms could unlock a new frontier in internet enabled innovation.
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