Over the past month, Ethereum has been bounding upwards in terms of both price and market capitalization.
Certainly, there are a couple of trends happening that are fueling the run. To me, it seems like the idea of mainstream acceptance, as expressed by the recently announced Enterprise Ethereum Alliance, as well as a general acceptance in the community surrounding ethereum and the system’s governance, are two major factors.
Does there need to be a dominate blockchain, and will it be ethereum?
In a post last week, I wrote about how there are many parallels between the evolution of blockchain and the early internet. One of the most relevant threads was how internet users consolidated around one protocol to build out the commercial internet, which ultimately led to widespread acceptance.
Decentralized blockchains derive their utility from not having one ruling authority or institution, making them more secure and less corruptible. But decentralization doesn’t necessarily imply diversity. It will be interesting to see if the blockchain market consolidates and, if so, how many user options will really remain.
Ethereum is getting a lot of attention right now because it can be used as a foundational structure for smart contracts, which can be used by business and organizations for all kinds of things from customer loyalty programs and crowdfunding campaigns, to ownership and escrow services.
There is also a sense that ethereum is using its momentum to move forward, while bitcoin is debating scaling and other key functionality issues.
Mainstreaming doesn’t always come in the form of regulations
Give the big news last week about the SEC’s denial of what could have been bitcoin’s first ETF, it’s interesting to see how another mechanism for mainstreaming is unfolding with ethereum.
Bitcoin seems to be stuck in a feedback loop: governments won’t regulate it because they say it is unregulatable. For some, not having an all-clear from the SEC is a major hurdle or obstacle to widespread adoption.
While on the ethereum side, corporate America has come calling. Nothing says mainstream and widespread than having corporate giants (like Microsoft, IBM, JP Morgan, etc.) endorse your blockchain and say they are looking for ways to implement it in their businesses and companies.
While the open arms of massive and stable corporations might not do much for investors that are looking for a way to peel off part of their portfolio into emerging cryptocurrencies, it does signal a certain level of market maturity and opportunity.