Since 2009 and the arrival of the bitcoin, cryptocurrencies have revolutionized our payment systems. While the domain still seems to be nascent, a currency emerged in 2015 could become the new standard-bearer: the ethereum. At first glance similar to the famous bitcoin, it stands out thanks to an anti-scam process never seen before: the intelligent contract. Will it be enough to compete with the so popular bitcoin? Evidence suggests that yes, with one important difference.
In an article eloquently referred to as « Everything you’ve ever wanted to know about Ethereum, patiently explained », The Next Web points out the assets of the famous cryptocurrency. Among these, the ingenious use of intelligent contracts, explained in this way: two friends make a bet. One predicts that it will rain tomorrow, the other that there will be sunshine. Both put €100 at stake. How can we insure that, besides mutual trust, the one who loses will deliver? This is where the intelligent contract comes at play. The two friends program it together so that it pays €200 to one or the other after having automatically checked the weather. No risk, no scam. The ethereum then plays a role of financial intermediary, without which the intelligent contracts could not function.
Little ethereum grows fast
CoinMarketCap follows in real time the stock exchange activities of cryptocurrencies. If the bitcoin remains at the top with a market capitalization of 57.6 billion euros on August 24, 2017, it is followed by the ethereum, at 25.2 billion euros. If the gap remains considerable, both currencies do not evolve at the same rate. In a comparison dated from April 10, 2017, Forbes reported that the bitcoin was estimated at $ 19.4 billion (a 200% evolution) and the ethereum at 3.9 (or 733%).
Even Toronto is getting at it
Toronto has always been considered the stronghold of the bitcoin. Yet, on August 14, LocalCoinATM announced that their automatic bitcoin vending machines in the Canadian city are now supporting ethereum transactions. In the release, they specify that “ethereum has revolutionized the cryptocurrency industry with its intelligent contracts. (We) hope that its use will replace that of fiduciary deposit or crowdfunding”.
Bitcoin, a deflationary currency
On his website, La Maison du Bitcoin explains that the total number of bitcoins has been set at 21 million, indicating that “this number is etched in the protocol itself, and the monetary creation in the Bitcoin world is governed by an algorithm which increases the number of bitcoins in a regular and orderly manner”. Of course, this allows the cryptocurrency to retain its value and ensure its liquidity. But it also indicates that it will one day come to an end. And at this time, a limitless currency, such as ethereum, will certainly be there to take over.
The only cloud on the horizon
There is always one. This summer was cruel for ethereum, which was linked to many piracy scandals. As reported by ZDNet, these have always taken place during the Initial Coin Offering (ICO). To put it simply, these ICOs can be akin to virtual fundraising carried out by companies. Internet users can then buy “tokens” related to the project of interest, traded against etheriums or bitcoins. However, on many occasions, hackers have arranged for this money to end up in their pockets. They simply hacked the emails and the websites of the companies to change the address of the wallet in which the money of the contributors went to. In total, nearly $9 million were stolen between July and August 2017.