As Bitcoin continues to be mired in a digital civil war regarding its next step in software development, another virtual currency contender has been rising in the ranks.
This currency, called Ethereum, has recently sky rocketed in price and legitimacy; it is currently valued somewhere in the arena of 1000 percent of what it was originally valued only three months ago.
That said, Bitcoin has proven many times over that price spikes come and go. Perhaps a better indicator of the potential future of Ethereum is the amount of attention it has attracted from finance and technology giants including JPMorgan Chase, Microsoft, and IBM. Representatives of these companies have described the alternative virtual currency as a kind of “Bitcoin 2.0.”
Ethereum is similar to Bitcoin in that its software is built on a blockchain in which every transaction is recorded publicly. These systems allow for the exchange of money and assets directly, quickly, and inexpensively, as they cut out the long chain of expensive and potentially corrupt middlemen.
This ground-breaking technology was enough to blow the minds of many internet users and business analysts when it first surfaced along with Bitcoin about a decaSet featured imagede or so back. Now Ethereum has elaborated even further on the concept of virtual currency, creating ways for users to create online markets and programmable transactions known as smart contracts.
For example, one developing application promises to allow farmers to put their produce up for sale directly to “consumers” and to be paid directly by “consumers.” This way farmers can avoid money handlers and keep what would have been the middleman’s share.
Ethereum also provides new ways to manage other business transactions, from paying for utilities to gambling to Ponzi schemes.
The first fully public version of Ethereum has only been recently released, so whether the system will be able to make good on its promises in the long term remains to be seen. The currency has yet to face off against the many technical and legal problems that Bitcoin was forced to endure, plus some Bitcoin advocates have made the point that Ethereum’s more complicated system may open the door for increased security problems.
For the time being, Ethereum has faced little testing and few attacks. Its novelty may invite intense scrutiny by authorities given its ability to be used to make fraudulent contracts that can be written directly into the system.
That said, it’s that same complexity and sophistication of software that has made Ethereum so interesting to major executives in corporate America. IBM revealed that it had been experimenting with Ethereum as early as last year, allegedly haven taken an interest in the software due to its potential to allow the company to better control real world objects in the Internet of Things.
Microsoft is also keeping a watchful eye on Ethereum’s development.
“Ethereum is a general platform where you can solve problems in many industries using a fairly elegant solution- the most elegant solution we have seen to date,” confided Marley Gray, a director of business development and strategy at Microsoft.