Do you feel like you’ve missed the 1000% gains of Ethereum over the past couple of years? The future of ETH is still super bullish over the next 5-10 years. In this article we will discuss the full Ethereum Use Cases. Ethereum is likely just starting its rapid growth phase and seems to be on track to disrupt a number of industries including banking, finance, internet companies, gaming companies.
What is Ethereum ?
In simple words Ethereum is a relatively decentralized blockchain platform upon which apps and other types of smart contracts are built. ETH is the tokenized native cryptocurrency to the Ethereum blockchain and owning ETH is kind of like owning shares in the Ethereum network. So by purchasing ETH you’re essentially buying into the future gains of the network, which will be paid out either in price appreciation of the Ethereum token or through staking or through lending and a couple of other ways.
Major Ethereum Use Cases
What are the Ethereum applications examples? The ETH crypto use cases includes DeFi, Smart Contracts, NFTs, Web3, and DAOs.
DeFi is a short word for decentralized finance. There’s a lot of DeFi platforms out there that essentially either help users lend money or borrow money without having to go through a bank or a traditional institution. The DeFi market has grown from less than 10 billion in 2020 to over 75 billion in Feb 2022.
Why is this relevant to Ethereum? Well because ETH is the preferred collateral of DeFi and the thing about DeFi is that it scales faster and more efficiently than traditional finance. In the early 2000s movie, news, tv and music etc all that moved online. Now we’re seeing a movement to on chain and Ethereum is currently winning the race to be the platform upon which most of DeFi Platforms are built.
2. Smart Contracts
So smart contracts are basically agreements that automatically execute once certain conditions are met. Now there’s a lot of potential applications for smart contracts. For example uniswop, which is a decentralized exchange that’s built upon the Ethereum blockchain uses smart contracts to ensure that users are able to swap one crypto asset for another without having any centralized broker.
There is all kinds of other Ethereum smart contract use cases including stablecoins. For example which use these smart contracts to make sure that the stablecoin cryptocurrency stays pegged to the US dollar by pulling real-time data on how much the US dollar is worth. Where are all these smart contracts built? Most of them are built on the Ethereum blockchain or on its side chains. Polygon (MATIC) is a side chain of the Ethereum and it’s a layer 2.
Another Ethereum use case is NFTs and with massive platforms like OpenSea being built upon Ethereum and with much of the NFC economy being built upon Ethereum. When people buy and sell NFTs they are not buying them denominated in dollars, they are buying them denominated in ETH. NFTs sector is growing enormously and it essentially started with jpegs but it’s expanding into NFT gaming. Most major game developers are now looking at how they can incorporate NFTs into their games. Online gaming is becoming an increasingly immersive experience. There are play to earn games, where people can actually earn digital items (NFTs) by playing these games. Then they sell these digital items (NFTs) to earn money and use it in real life to pay for their living expenses.
There’s utility NFTs like Veefriends where owning an NFT gives you access to something in real life like a ticket to a conference. There’s entire worlds or metaverses that are being created right now, where NFTs can be used and transacted and become interoperable amongst one metaverse to another. Honestly in this sector Ethereum is a best use case cryptocurrency. Ethereum is far ahead of the competition and there’s massive demand for Ethereum blockchain because of NFTs specifically which is extremely bullish for people that actually own the ETH tokens.
4. Ethereum Use Cases in Web3
People are going to begin interaction within Web3 (virtual world build over blockchain technology) and it’s going to propagate pretty quickly and the rate of digital spending with cryptocurrency is going to continuously increase. The expansion of web3 will likely continue until it encompasses everything just like the internet did in the early 2000s. With increase in digital spending as a result of course Ethereum will extremely bullish.
5. Ethereum Use Cases in DAOs
The best Ethereum use cases includes DAO. DAO stands for decentralized autonomous organizations. DAOs are horizontally organized group of people that makes decisions by voting on proposals. In order to have a vote on proposals you usually need to own shares in the DAO, which comes in the form of tokens cryptocurrency. A good example of a DAO is the MakerDAO which governs the Dai stablecoin cryptocurrency. Many DAOs are built upon the Ethereum blockchain.
Ethereum is not the only blockchain that’s competing for market share of each and every one of these different use cases. There are other layer 1 Ethereum competitors blockchains that have been described as Ethereum killers like Solana avalanche or terra. All of those other blockchains but why Ethereum is going to be the winner. Ethereum is decentralized, which makes it much more secure than some of its competitors.
Being decentralized means the verification of blocks on the blockchain is confirmed by a decentralized pool of validators all over the world instead of having some centralized person. These validators get paid small rewards in exchange for that. This is more secure than other chains but there are drawbacks i.e. slower transactions potentially and higher gas feeds. The Ethereum 2.0 is actually going to solve a lot of those issues.
A massive developer community for Ethereum over 250000 developers that have created over 1000 apps already and with the advantage of scale that. Ethereum blockchian is more secure and decentralized making it the most desirable for building projects. Investors will not take a huge risk and will not go with an alternative blockchain whose development is years behind Ethereum.
With the Ethereum 2.0 upgrade the current Transections speed 6 per second can reach 100-10k and the transaction fees for the Ethereum network will reduce. Eth 2.0 is also projected to increase the overall security of the network because it’s going to increase decentralization by lowering the barrier to entry. Ethereum is a very good investment for long term, in short term the price may fall but the future of this crypto is looking very bright.