Sector: Cloud Computing
Ethereum is an open-source, public, blockchain-based distributed computing platform featuring smart contract (scripting) functionality. It provides a decentralized Turing-complete virtual machine (Ethereum VM), the Ethereum Virtual Machine (EVM), which can execute scripts using an international network of public computers. Ethereum also provides a cryptocurrency token called “ether”, which can be transferred between accounts and used to compensate participant nodes for computations performed.
Adoption Vectors – Ethereum provides a platform for developers, which depends on projects built on its protocol in order to reach a wider audience.
Project Innovation – Ethereum was the first blockchain to provide a turing-complete developer ecosystem, and has managed to hold onto most of the developers in the space. As a result, much of the altcoin market is running on Ethereum-based tokens.
Valuation Metric – The ETH token is required to purchase Gas, which is exchanged for computing power on the Ethereum Virtual Machine. In this way, the value of the Ethereum blockchain is dependant on application developers’ need to purchase Gas.
Risk Assessment – As ETH’s value is tied to the amount of computations on the network, it is imperative that the core EVM can efficiently scale to meet this increased demand. At this time scaling is an unsolved problem and presents substantial risk to the survival of this network.
Team – Vitalik Buterin is a star among the cryptocurrency community, and has gathered around him a wide network of activist developers who believe in the mission. The Consensys Foundation and others have been instrumental in building out projects on the network, but have not been able to assist at this time with core concerns such as scaling.
The Ethereum Virtual Machine allows any developer worldwide to launch an application on a wide network of devices, making it effectively impossible for any government actor or malicious party to intervene or disable. Furthermore, Ethereum has been adopted by major legacy financial intermediaries as these companies begin to test enterprise bockchain solutions.
In addition to providing developers with an easy to use blockchain system and solution, Ethereum hopes to provide mass market products that can replace existing systems such as social media sites and search engines with distributed peer to peer options.
While the core of the EVM is now active and provides a Turing-complete model, the limitations of scalability and data inputs via oracles has proven difficult to resolve.
As a result of the ease of creation of Ethereum sub-tokens, there has been a recent gold rush in new currencies on the Ethereum platform in 2017. These currencies now represent more than half of the overall cryptocurrency market, with much of this funding being directed towards research on decentralized applications and advancement of the Ethereum protocol.
The core innovation of the Ethereum network was to launch a Turing-complete software environment on a public blockchain. This enabled massive crowdfunding via ICOs, but since then, innovation has slowed as more complex challenges such as scaling has become roadblocks.
Incumbent financial and technology companies have begun to adopt the Ethereum platform for private solutions. Future growth is then derived from the number of “live apps” running on the network. The largest growth catalysts stems from the enterprise adoption of smart contracts to verify supply chain transactions as well as legal contracts.