How Companies Are Using Ethereum as an Advanced Version of Bitcoin

Updated on May 27th, 2022
Ethereum coin

Did you know that in 2015 Bitcoin, Ethereum, and other blockchain-related startups raised over $1 billion in total investments? That’s an impressive increase from the $347 million invested that industry enjoyed in 2014.

Even more impressive is the fact major organizations, such as American Express, Deloitte, Goldman Sachs, MasterCard and the New York Stock Exchange, have also poured millions of dollars in blockchain firms. And, that includes particular attention to Ethereum.

“Smart contracts are incredibly exciting, and have the potential to disrupt countless industries,” Blockchain Capital said, who also added that it “will deploy about half of the fund towards new, early-stage investments. The second half will be geared towards follow-on investments for top companies moving into later stage rounds.”

Boost VC is also looking to include Ethereum startups within its portfolio because companies who are beginning to use the Ethereum blockchain “because of its ease of use and robust toolkit.”

But, what exactly is the Ethereum blockchain and how are companies using it as an advanced version of the blockchain?

Enter the Ether

Simply put, Ethereum is a cryptocurrency and a blockchain platform that contains smart contract functionality. It was proposed in a white paper by Vitalik Buterin in late 2013. The network went live on July 30, 2015.

Tyler Woods describes how Ethereum works in Technical.iy Brooklyn;

“What Ethereum does is take the blockchain infrastructure that makes bitcoin so appealing to so many people, and opens it up to be used as a platform for programs. Like the bitcoin blockchains, the Ethereum blockchains will have unique key codes for each individual transaction that cannot be edited or reversed and are visible to the public. Since the blockchain is not held on any one server or owned by any one corporation or government, it becomes impossible to edit surreptitiously.”

According to Aurélien Menant is the co-founder and CEO of Gatecoin, “Ethereum is basically a kind of Bitcoin 2.0.” Menany goes on to say, “where not only payments but smart contracts are managed on a blockchain.”

Greenpoint-based startup founder Dawud Gordon informs Woods that “It’s impossible to cook the books with the Ethereum blockchain, to put it simply.” An analyst at a private equity and venture capital financial tech firm added, “What you can do with an immutable public ledger is pretty boundless in the financial sector.” The analyst added, “With that much power behind it, you could have contracts that execute themselves, smart contracts they’re called.”

Ashley Tyler, who does social innovation for Consensys, says, “The barriers to entry are a lot lower. With Ethereum out it makes it easy for an average, everyday programmer to build, and — boom — maybe that becomes something big.”

How Companies Are Using Ethereum as an Advanced Version of Bitcoin

Ethereum blockchain technology is already being utilized by some innovative companies like the gamified ride-sharing company Arcade City. Christopher David, the founder of Arcade City, told Bitcoin.com that “The blockchain will be the great leveler, undermining centralized authority in industry after industry. By decentralizing decisions about pricing and particular services to individuals themselves, we are creating the marketplace of the future.”

David believes that “the idea that Ethereum will do for human relationships what Bitcoin is doing for money: remove arbitrary intermediaries and empower direct person to person interaction.”

Another interesting use of Ethereum is the partnership between RWE, a German power company, and Ethereum-based blockchain startup Slock.it. The company is looking to use this technology to establish “a seamless and affordable electrical charging infrastructure.”

As for the fintech industry, Jani Valjavec, co-founder of Cashila, tells The Cointelegraph;

“The current phenomenon for Ethereum’s rise of exposure is primarily because of the ongoing fights with no realistic solution in reasonable time frame in the Bitcoin camp. However, the 2nd part of Ethereum’s rise (connected with price of course) is the upcoming release on Homestead (means Ethereum will be out of BETA on march 14th) and ongoing good news regarding ddaps built on top of Ethereum.”

Valjavec adds that Ethereum won’t just be a system that where tokens can be exchanged, but also “where decentralized applications can run and added that even Bitcoin could run on Ethereum.”

The fact that Microsoft recently teamed up with the blockchain startup Consensys to allow Azure customers that opportunity “to experiment with and build cloud-based blockchain applications, from securities trading to cross-border payments to corporate accounting, and offer them to their customers” seems to validate the potential benefits that companies could receive.

One such company is Gatecoin, a bitcoin and ether trading platform. Founder and CEO Aurélien Menant says that these so-called decentralized apps (Dapps) are “not only a digital currency but more a digital commodity, fueling that ecosystem.” In fact, Ethereum is building “a global, interconnected, secured, programmable network.”

Menant also says that his company is “closely following different projects of Dapps being developed on top of Ethereum.” He adds, “For us, they are the next disruptors, and we are expecting to see the next Facebook, Uber or Airbnb, being fully decentralized, relying on blockchain technology, and probably built on ethereum. There are currently many projects about to launch, offering decentralized messaging, social networking, crowd funding, peer to peer landing or cloud computing apps.”

Some companies that Menant has worked with is REP, the digital token of Augur, which will be a decentralized predictive market, as well as the already mentioned Slock.It which gives users the chance to rent anything securely.

While Menant believes that the doubts regarding Bitcoins ability to evolve and scale played a part in the hype surrounding Ethereum, “the recent announcements from flagship companies like UBS, Microsoft or R3CEV, who all declared using Ethereum for their blockchain applications” are what have caused the excitement surrounding Ethereum.

Chalmers Brown - Former CTO of Due

Chalmers Brown - Former CTO of Due

I'm Chalmers Brown and former CTO of Due. I'm a big fan of technology and building financial products that help people better their lives. I have a passion for financial products that help people. I build complex financial infrastructure protocols that help scale financial companies. They are secure and support millions of customers worldwide.

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