Top 20 Alternatives: Ethereum (ETH)

Highlights, summary, review and discussion of Ethereum

• Ethereum is a blockchain platform that allows developers to create complex smart contracts and blockchain applications more easily using a Turing-complete scripting language.
• A smart contract is a self-enforcing and self-executing formal agreement embedded in software or hardware.
• Users must spend Ether (ETH) to execute contracts.
• The consensus algorithm is currently POW, but plans to transition to a proof-of-stake system in 2017.
• Vitalik Buterin conceived of Ethereum in 2014 and it launched in July 2015. Since then ETH tokens have had a dramatic fifteen fold increase in value from a total market capitalization of $72 million at the beginning of the year to over $1.1 Billion today.

The Ethereum ecosystem has significant developer support and is now flush with ETH capital to support businesses. Although there are limitless possibilities of applications that could be built with Ethereum it will take some time for the users and developers to trust the robustness, performance and scalability of the system. Furthermore businesses require product-market fit and compelling value propositions to be sustainable. Many of its technological capabilities may be relegated to niche applications. However just like how companies used Linux, larger institutions may use Ethereum in-house for a variety of purposes to make their businesses more efficient. IBM and Samsung displayed potential applications with Ethereum technology in a proof-of-concept project involving IOT early last year. Microsoft also announced that it partnered with Consensys to offer Ethereum blockchain-as-a-service. Nick Szabo, who is the father of 'smart contracts' and whose bitGold ideas were the foundation of Bitcoin, is a supporter of Ethereum and may have a Bitcoin/Ethereum startup in the works. Just recently many in the Ethereum community committed over $100m to the DAO, a decentralized autonomous organization written as a smart contract, that is being created to provide an organizational structure to help fund and manage projects for Ethereum. You can read more about the DAO here. Coinbase also recently added Ethereum trading to its rebranded exchange.

Bottomline: Ethereum’s Ether (ETH) is a coin that represents the cost required to use its network to execute smart contracts. Ethereum is like the Linux of blockchains with strong developer support. It can provide larger companies the ability to create many in-house applications and startups can use the technology for a very broad set of businesses applications. Monitoring and evaluating use-cases and the growth of company adoption will give us a good indicator of the strength of the ecosystem.

Please respond below to add any insight or ask a question to elevate the community's understanding of Ethereum. Here are some questions to consider:

• What are the main reasons why you invest or don't invest in ETH?
• What projects & applications are you most excited about?

For some background on this blog series and analysis of other currencies click below:
Top 20 Alternatives: Introduction