Ethereum´s Role in The Economy
Global financial markets have taken a major blow after the coronavirus pandemic started. Cryptocurrencies even took a hit, as Bitcoin fell from 10.3k USD to around 7k USD as I am writing on the 18th of April. Ethereum saw, more or less, the same kind of price movement.
Ethereum in itself is a decentralized application that allows for the creation of the Ethereum Virtual Machine (EVM). Ethereum serves as the infrastructure that runs the decentralized applications online. Its a platform, the currency is Ether. The coding language of Ethereum is Solidity. This programming language is used to write what are known as smart contracts, which are the logic that runs the decentralized applications. These apps are being used around the world already for peer to peer transactions without a centralized authority to conduct the event.
The uprising of crypto has brought forth the idea of decentralized finance, and the Ethereum Network allows for individuals around the world from all income and social backgrounds to access financial infrastructure that makes their lives much easier. If you have some things to do at the bank you generally go to the bank and meet with a representative in order to accomplish what you are aiming for. With the Ethereum Network, these day to day tasks become easier to conduct. You can access your financial needs from your home. This is what makes Ethereum powerful, which makes it useful with sufficient marginal utility. Crypto lending platforms are a prime example of how these decentralized apps are becoming more and more useful in times like these. The coronavirus can spread through the air and leaving your house these days means that you are actively taking on unwanted risks on yourself and behalf of your loved ones that are in the risk group.
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Within the finance industry, Ethereum has particularly been of large interest by large enterprises. Banks are tokenizing end to end bonds where individuals can buy and sell fixed income securities via decentralized applications on the Ethereum network. Alternative investment companies and investors are adopting the network faster than any other significant subgroup. The integration of the blockchain and as a result of the Ethereum Network, within investment banking will make the industry more cost-effective and transparent. This is something the industry desperately needs.
At the end of the day, decentralized finance platforms will make the adoption of cryptocurrencies such as Ethereum faster than anticipated. Permissionless protocols and transparency while using the applications are also pros on top of the aforementioned. Yes, the coronavirus helped the case for Ethereum, well hopefully it will make the adoption process smooth. As a result, decentralized finance will a more widely adopted subject.
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