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Ethereum ETH Blockchain Smart Contracts Gathers Pace in the Digital Currency Space

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Some years ago in our blog (nov 2013 to be precise!) we reported on the growing phenomenon of Bitcoin which was, at that time, growing its core user base and acceptability. Bitcoin is built using blockchain technology. In 2013, a very bright 19 years young Russian named Buterin put forward a thesis that blockchain technology need not be limited to digital currency; it could be developed into a smart way to agree the fulfilment of a contract. He then set about developing Ethereum with an ETC classic currency. This blockchain technology has recently been picked up by many of the world's leading global firms under an agreement association called EEA, Enterprise Ethereum Alliance. This union of users including Intel, BP and JP Morgan will develop Ethereum technology into their software developments especially around crypto-currency and smart contract fulfilment.

The world requires safer digital exchanges with a general ‘ledger’ record of transactions and the management of hard currency and fiat money is becoming challenged. The costs to produce hard currency for governments is vast. Also management of money is expensive and it is not uncommon to be charged for depositing sterling notes nowadays. The EEA will seek to use ETH (Ether, the currency of the Ethereum network) smart contract settlement within its projects and so bolster its fight against hackers as well as build a new age platform for global currency exchange. The old banking systems are creaking and have become dated and vulnerable to attack and require heavy human management. Blockchain technology will go some way to eliminating the risks and will save time. The series of agreements to enact a contract must be sequentially agreed by hundreds and possibly thousands of devices so would be extremely difficult, if not impossible, to manipulate. A record ledger of the contract is stored digitally.

The test for ETH is in its take up as a currency as well as Ethereum as a smart system. Bitcoin is the global digital currency of choice. ETH could well test bitcoin’s complete hold on the market as will a few other upcoming currencies such as Dash and Monero and as we write this, bitcoin’s digital currency market share has dropped to 70% from 100% not long ago. ETH has an interesting edge. As a result of a hack (around its DAO platform) Buterin created a hard fork away from ETC (the Etheruem classic coin) to ETH (the 'new' Ether). Many now argue that ETH is a more reliable currency than Bitcoin. We do accept however that both will have a real future in the world’s currency and contracts development space (as we did report on bit coin back in nov 2013)

Blockchain systems are being integrated into many central systems to decentralise them. Centralised platforms will be very hard to protect from more enabled hackers and so the interest in this technology from leading systems developers is growing. We would not be surprised to report in another 5 years time that ETH and its technology, bar major hacks, will be a household name. How can blockchain technoloy help your business? Some say, for example, that blockchain technology applied to email would completely kill spam.

Well rather than give an opinion ourselves, here is a quote from one of the big 4 accounting majors each of whom are testing blockchain technologies in various formats. Ernst and Young has provided digital wallets to all employees, has installed a bitcoin ATM in their office in Switzerland, and accepts bitcoin as payment for all its consulting services.Marcel Stalder, CEO of Ernst and Young Switzerland stated "We don’t only want to talk about digitalization, but also actively drive this process together with our employees and our clients. It is important to us that everybody gets on board and prepares themselves for the revolution set to take place in the business world through blockchains, [to] smart contracts and digital currencies." PWC, Deloitte, and KPMG have taken a different path from Ernst & Young and are all testing private blockchains. Smart contracts can be exercised without human intervention (after initial setup ) and so the obvious business gain would be in cost savings and greater time efficiency. 24/7 expensive executive time would become less reliant when a nifty on-line computerised solution will do. Watch this space!

(At time of writing the value of ETH is $42, having risen from $20 in past few weeks)

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