Ethereum is the world’s most popular digital contract compiler, maintained by many but owned by none. Perhaps one of the most interesting factors behind its popularization is the future it paints — one that transforms our current internet standards for ownership, value creation and, most importantly, privacy.
A transformed future?
Not only can apps be written on top of Ethereum, but it allows any digital thing — a picture, a music file, a video, your mom’s favorite pumpkin pie recipe — to be uniquely owned, traded and stored for value, among many other possibilities that are created daily.
While many have predicted the future of the internet to be layered in bundles and levels of protection, it turns out that, paraphrasing Tim Berners-Lee, making the underlying technologies accessible to everyone supercharges its adoption and usefulness.
Ethereum and the emergence of Web 3.0 paint a shifting picture — an internet not just private, but open and transparent by default.
A brief history
In 2013, Vitalik Buterin conceived the idea of Ethereum, which would be developed and deployed two years later. The platform was built to allow anyone in the world with access to the internet to write permanent applications (known as decentralized apps or dApps) upon it, which anyone else can interact with but cannot change — basically open source software with integrity to the nth degree. The bread and butter of these apps are called smart contracts — a digital contract or intermediary.
Translated, that means financial and legal services no longer require a middleman. Ethereum basically substitutes an escrow agent, a notary, a bank teller who checks your ID, or a mortgage originator for an instant, digital transaction.
This invaluable function makes Ethereum one of the most recognized cryptocurrencies and blockchains in existence, with many contenders trailing. Bitcoin prices recently hit an all-time high, and the hype surrounding Ethereum remains in full swing.
Web 3.0, an associated concept, is an imagined future internet that uses these peer-to-peer blockchains to allow users to interact with data, value stores, entities, etc., all without a middleman.
Ethereum today
As Ethereum becomes an underlying infrastructure for legal cases, financial deals, binding agreements and more, understanding its weaknesses and strengths will become a fundamental trait of property ownership and transfer.
Updating Stephen Hawking’s words on how “basic computer programming is an essential skill to learn,” understanding the fundamentals of smart contracts such as those on Ethereum will become a basic legal and financial skill.
Today, the most booming applications on Ethereum are NFTs — non-fungible tokens. While NFTs are relatively new, they’re catching on with consumers, artists and investors not only as a store of value but as an assertion of digital, unique ownership.
NFTs allow anything digital (any file) to be owned and traded on the internet because it can’t be manipulated, changed or copied – it’s non-fungible. Any social media hubbub surrounding Apes, Kittys or Punks are all in relation to the burgeoning fan-favorite phenomenon of luxury digital art.
We predict that one use case for this technology will be in interplanetary mining, as companies based on Earth will need to buy and sell mineral rights in asteroids that few if any of their human employees have ever actually visited or seen themselves.
Other predictions for use cases are mortgage lending, property purchasing, event ticketing, music festivals, file storage and gaming — Axie Infinity, for example, is a testament to how players can make a decent living in an NFT-based gaming world.
The possibilities are endless and are being thought up by the curious and energized community more and more every day.
Challenges and Ethereum of tomorrow
As regulation catches up to the power of this underlying technology, many wonder if we’ll see attempts to control it. Much like the years-long debate in the Crypto Wars, which entailed requests to compromise or break encryption, changes to the assertions of Ethereum’s immutability could compromise its main valuable characteristic: its permanent integrity.
There may be a potential conflict between Ethereum’s immutability and its widespread adoption. It might mean that financial regulators will attempt to take some form of ownership or control over its deployment. We would be curious as to how those potential future regulators would answer the question: How can a widely connected sphere of nodes be cautiously governed while not compromising its true value — decentralization itself?
Other challenges and limitations the technology is likely to face are performance sustainability — fees to build on top of Ethereum called gas fees have gone up in recent years and the platform is known to be slowing in processing time. Ethereum 2.0 is anticipated to smooth inefficiencies, but how do we continue to maintain speed in a blockchain optimized for storing and computing each and every transaction?
Security also remains a challenge, with known Ethereum vulnerabilities existing though not widely exploited. Poly Network reported a hack this year that resulted from a “vulnerability between contract calls.”
Smart contracts are intricate and complex functions to write, so they require in-depth auditing before being deployed to a network. Ethereum security is also built on passwordless, asymmetric cryptography. It’s entirely possible that quantum computing will eventually disrupt our asymmetric cryptography standards.
We’re interested in how Ethereum and blockchains can be sustained, and we’re HODLing all the way through. Into the metaverse and beyond ….
The views expressed here are those of Ashley Tolbert and Tarah Wheeler and not the views of their affiliations.