A rival virtual currency to Bitcoin, Ethereum, has gained over 1,000 percent in the last three months while you might not have even heard of it.
Big hitters on the Ethereum bandwagon
While Bitcoin enjoyed a meteoric rise followed by the inevitable crash, Ethereum has many believing that it may have a staying power and a legitimate place in enterprise. This includes a growing interest from JPMorgan Chase, Microsoft, IBM and others.
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Ethereum, like Bitcoin, is built on a blockchain but offers businesses quite a bit more transparency as each transaction is publicly recorded. This has the tech and finance giants mentioned above hopeful that money and assets could be efficiently transferred with Ethereum.
In addition to personal transfers of the currency, Ethereum allows businesses to create markets and transactions that are programmable and called smart contracts. These smart contracts allow users to by goods directly from producers, place sports bets and more.
The first public version of the Ethereum software was released last month.
Security concern, corporate interest
A number of security experts have already expressed their concern with the software and worry that because it is so new, it hasn’t seen the attacks that plagued Bitcoin over the years.
However, that hasn’t deterred some heavy hitters like IBM from experimenting with the system for use with its designs for the Internet of Things, nor has it stopped Microsoft from exploring how it could be used with its cloud computing platform Azure.
“Ethereum is a general platform where you can solve problems in many industries using a fairly elegant solution — the most elegant solution we have seen to date,” said Marley Gray, a director of business development and strategy at Microsoft.
Major banks remain interested in blockchains and JPMorgan has already created a tool called Masala that allows its databases to cooperate with the Ethereum blockchain.
“Bitcoin is still probably the safest bet, but Ethereum is certainly No. 2, and some folks will say it is more likely to be around in 10 years,” said crypto-currency researcher and computer science researcher at Stanford, Joseph Bonneau. “It will depend if any real markets develop around it. If there is some actual application.”