Despite the global pandemic, the cryptocurrency market has continued to boom. Within a year, the price of Bitcoin jumped from Rs. 6,00,000 to Rs. 25,00,000 – a 400% rise. Ethereum, being the second-largest cryptocurrency with respect to market capitalization, crossed over Rs. 1,00,000, rising in value by 1,000% in one year.
While there are several reasons for the increased popularity of cryptocurrencies, it’s the blockchain that’s the biggest factor. After all, blockchains present you with three major advantages:
- They are decentralized. They do not need a centralized server to keep track of the transactions.
- They cut the traditional institutions out of the chain by excluding the ’middleman.’
- Proofing of transactions 24/7 can help in resolving ambiguities instantly.
In what may surprise some crypto enthusiasts, it isn’t Bitcoin’s blockchain that is making everybody turn their heads. Instead, it is Ethereum. Due to its ability to support the blockchain’s varied use cases, Ethereum is a mechanism from which large blockchain projects can be launched and raise money. Its special features – such as smart contracts – are already finding itself in multiple applications such as finance, healthcare, entertainment, supply chain management, browsing, etc.
To date, thousands of decentralized apps have been built by millions of users on Ethereum, and billions of dollars have been generated by these dApps. After all, Ethereum is called the “mother of dApps.”Moreover, the smart control protocols allow the blockchain to function beyond just a currency-only application, whereas bitcoins blockchain works fine only for finance industries. Now, let us take a look at a few of the amazing applications of Ethereum.
A fungible asset is something whose units can be easily traded like money. NFTs or Non-Fungible Tokens are one of a kind in digital assets, where you can buy and sell them like any other properties or assets, but without any tangible form of their own. The tokens could be certificates of ownership of virtual or physical assets. They are generally used in art, gaming, and the provenance of luxury goods.
NFTs started gaining popularity in late 2017 when CryptoKitties’ digital cat collectibles were launched. Basically, CryptoKitties is a blockchain game launched in 2017. It was developed on Ethereum. This was one of the earliest attempts made to deploy blockchain technology for recreational purposes. Throughout the years, they have attracted a lot of audiences to cryptocurrency and blockchain technology.
One of the most consumer-friendly applications of Ethereum would be blockchain-based IDs. Well, why do we need these? Blockchain identity management systems could eradicate prevailing issues such as Data Portability, Inaccessibility, and Fraudulent Identities. At present, we all store our personal identification information on the centralized government databases, which have numerous single points of failure.
With the use of a decentralized identifier, all the prevailing issues can be easily overcome. A decentralized identifier is a private key that is assigned to each person, company, object, etc., where only the private key owner can prove their ownership or identity. For example, this might work out really well in airports especially.
Rather than handing your passport to the officer present, you can just get your digital ledger screened, where all your travel and personal information would be present. This could result in quick and hassle-free movement.
Supply Chain Management
The broadest consumer applications of Ethereum are related to supply chain management. As we had discussed earlier, it is a digital ledger, and it removes paper from the scenario, which leads to less or zero errors and frauds.
The blockchain is very transparent, allowing consumers and businesses to track their products at all times. Apart from this, it also provides information about the results of quality tests of the products, thus ensuring the authenticity of all the products, from luxury goods to food.
Despite legislative regulations and efforts to increase cybersecurity, 2.8 billion consumer data records were exposed in 2018, at an estimated cost of more than $654 billion. Ethereum, through cryptographic methods, ensures secure sharing of data, which is essential for the transmission of sensitive information such as identity information, medical reports, etc. Blockchains allow for a large number of interactions to be structured and carried out in a way that greatly increases reliability, removing risks associated with centralized databases.
Typically, real estate or any other investment would require a lot of money up-front in order to acquire the asset. Through blockchain, investors can start trading fractions of tokens. This method of fractional ownership lowers the barrier of investing. It also helps investors in avoiding maintenance issues of the asset. There are a lot of Ethereum based startups that are offering people fractional ownership of a big company, luxurious goods, or real estate. This allows customers to diversify their investments.
Let’s talk about IoT, one of the fastest-growing technologies in the world. For those of you who don’t know, IoT is a combination of artificial intelligence, machine learning, and cloud technology that enables wireless connection of devices over a common hub, for efficient working as a whole. Through Ethereum, if a part of the IoT network or any connected device is broken, a replacement can be ordered automatically. It can help in determining the trustworthiness and quality of the devices. In other words, this is an extension to what Ethereum could do to supply-chain industries, but instead, for machine-to-machine transactions.
With the flexibility and robustness of Ethereum, there is a continuous emergence of new applications. By looking at its wide range of applications in different industries, the future of Ethereum definitely looks very exciting.Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.