Ethereum is known as the second largest crypto network by market cap. However, can this asset be in use as currency in the real world? Bitcoin is known as the base money of the crypto world. Alternative crypto assets force to carve out their own respective niches and offer unique use cases. In the case of Ethereum, the idea is to use the blockchain as a base. A base for a wide variety of decentralized applications (dapps).
There is a segment of the Ethereum/ crypto user-base that views the network’s native token. This is known as ether (ETH), as a form of digital money. However, this is not exactly a widely-held belief. Instead, ETH is simply needed to utilize the various DeFi, non-fungible token (NFT), and other other types of dapps on the Ethereum network. Already have some ETH? Great. Now let’s take a closer look at what you can do with it.
The best place to spend ETH is on the Ethereum network. In this way, ETH can be view as a commodity. Like you need gas in your car for it to run, you need some ETH in your wallet to be able to interact. Dapps are back by smart contracts deploy on the Ethereum blockchain. Users must be willing to pay a little bit of ETH. This is in order for interactions with these smart contracts to be process. Process by stakers (previously miners) on the network.
DeFi has become one of the most popular areas of app development in the crypto space. Ethereum’s status as the top blockchain for smart contracts has greatly benefited ETH. Anyone who wants to trade between assets, borrow funds, lend funds, or perform any other DeFi-related activity on Ethereum will need to have a bit of ETH on hand to fund their activities. Of course, as the native currency on the ETH network, ETH can also be in use as an asset in these applications. Indeed, much of the liquidity on the network is based around ETH and stablecoins.
The other key types of applications built on Ethereum have to do with NFTs, the metaverse, and gaming. NFTs emerged as one of the key selling points of the overall crypto space during the market boom in 2021, and much of that activity was taking place on Ethereum. Digital forms of sports collectibles, trading cards, artwork, and much more are issue as NFTs on Ethereum, and the idea here is to bring scarcity of content into the digital realm.
Various NFT marketplaces, such as OpenSea, have become the most widely used platforms on Ethereum. Again, ETH has benefited greatly from this development, as Ethereum’s native token quickly became the default way to pay for NFTs in this emerging digital economy. There is also a large amount of crossover with NFTs, gaming, and the metaverse. Various gaming companies have decided to issue game items and avatars as NFTs on Ethereum, and there are many who believe NFTs will be critical infrastructure for property ownership in the metaverse.
One should note that NFTs are not an Ethereum-only concept, and some of the most prominent NFT projects you can find on separate crypto networks built specifically with a focus on this niche use case. In other words, there is not necessarily a requirement to use ETH when purchasing NFTs. In fact, much of the NFT trading activity on Ethereum itself is doimant in stablecoins. Two of the other major crypto networks operating as the basis for DeFi and NFT activity are BNB Chain and Solana.
When you move out of the world of DeFi and metaverses, the use of ETH/crypto as a currency becomes much less prevalent. While the Bitcoin development community has made a push towards greater acceptance of crypto/Bitcoin as a spendable, real-world currency with Lightning Network, there is far greater focus on this in Ethereum. And at this time, it seems more likely that stablecoins such as USDC and USDT will see the largest levels of adoption. This is in everyday commerce when it comes to Ethereum-based assets. At the end of the day, ETH is more of a commodity. A commodity for use on the Ethereum smart contracts platform rather than a currency.
And there’s nothing wrong with that. Of course, there is a bit of crypto/ETH acceptance in online stores. Ones as payment processors like Bitpay have integrated the alternative crypto asset. But adoption at brick and mortar retailers is effectively zero. If you have an interest in testing out the utility of cryptocurrency for everyday expenditures, you’re better off sticking with bitcoin. However, it’s also possible that the viability of ETH as a currency will increase. This is as more people leave the physical realm and head into the metaverse.
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