Ethereum could become an ultra-dominant blockchain

If the Ethereum blockchain succeeds in “The Merge”, it could overshadow the Bitcoin blockchain as its scope is wide, ecosystem observers say.

Ethereum, the “blockchain” that is changing the way it works this week, is a pillar of the entire economy that has been built around “blockchains”, computer protocols that could herald a new era of the Internet.

Ether, the cryptocurrency directly linked to Ethereum, represents only about 20% of the total value of existing virtual currencies, second only to bitcoin (40%). But Ethereum has a much broader scope of applications and serves as a medium for multiple uses.

A much broader scope

“It is around Ethereum that most of the developments in the cryptocurrency ecosystem are concentrated,” says Simon Polrot, a “blockchain” expert and former president of the Association for the Development of Digital Assets (Adan). .

Unlike the Bitcoin “blockchain”, designed above all to exchange units of value – the famous bitcoins -, Ethereum was designed from the beginning to be able to support lines of code.

It thus allows you to build a kind of global virtual machine, based on all the computers participating in its network – about 9,000 machines or “nodes” on the planet today.

“Ethereum is a bit like Windows or macOS. It is the operating system on which you can come and build your applications”, sums up Manuel Valente, of Coinhouse, a French company that aims to become “the future European cryptobank”.

“Anyone can program a new asset on Ethereum,” adds Simon Polrot.

The – relative – ease of use of Ethereum has made it, for example, the “blockchain” protagonist for the storage of NFT, these digital certificates of authenticity that perhaps will play a key role in future “metavers”.

Speculative madness

For Simon Polrot and Manuel Valente, Ethereum now concentrates probably 90% of the value of all NFTs issued to date. It is on Ethereum, for example, that the sports cards issued by Sorare, the French company that has just signed a contract with the NBA, are based.

The controversial “Bored Apes Yacht Club” monkeys, which have sparked speculative madness and attracted sports and entertainment stars such as Neymar, Eminem and Paris Hilton, are also on Ethereum.

Same observation in the field of decentralized finance (DeFi), these applications that allow you to lend or borrow cryptocurrencies.

According to the estimates of the specialized site Defi Llama, Ethereum today represents around 59% of the value committed in all current DeFi operations, far ahead of rivals such as Tron or BSC, the cryptocurrency created by the Chinese cryptocurrency giant Binance. .

Some rival “blockchains” have conquered a certain audience, such as Polygon, Tezos or Avalanche, the latest addition that is arousing a lot of interest. But Ethereum is in a position of strength and, “if he succeeds in transforming him, he can become ultra-dominant,” explains Manuel Valente.

However, Ethereum will have a new obstacle to overcome in 2023 or 2024, warns the expert: it will have to undergo a new mutation, in order to increase the number of transactions it can record per second. With 20 operations per second currently, this capacity remains too limited for its ambitions.

Before that, it will be necessary to make the “Merge” happen this week, an update of Ethereum that should upset the validation method on the “block chain”, an essential element of its functioning. In this case, in order to validate the operations, it will no longer be a question of having significant computing power but of pledging 32 ether (about 50,000 euros at the current price), a sum that can be seized in the event of bad conduct by the “validator. “. However, what if this novelty fails, for example due to an undetected defect in this protocol?

“In the short term, it would obviously be a very bad event,” says Simon Polrot. But the expert refuses to catastrophize: “In the worst case, there would only be a delay in the operation”, he anticipates.

Pauline Armandet with AFP

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