Vitalik Buterin explores the 5 most exciting use cases for his brainchild, the Ethereum network.
On his personal blog, Vitalik Buterin, co-founder of Ethereum, has shared a article mentioning what he believes to be the 5 most exciting applications of this blockchain and cryptocurrency network.
According to Buterin, while there are use cases and ideas that have not yet been fully explored, many of the blockchain applications that exist today are already showing their worth and potential.
In his article, the Ethereum co-founder focused on those well-known use cases, which are strengthening the network's utility and driving its growth towards mass adoption.
The main applications of Ethereum
Digital money
First of all, Buterin has highlighted the use of Ethereum as digital money as its main application.
According to Buterin, although Ethereum as a form of money was far from the most significant use of cryptocurrency, the change of consensus protocol The blockchain that took place last September is facilitating transactions on the network, allowing transactions to be validated in less time and requiring fewer confirmations to be considered completely trustworthy.
Also, protocols based on optimistic rollups and zero-knowledge (ZK) technology, such as Polygon Network, Arbitrum One and Optimism, are improving the scalability of the Ethereum network, facilitating the use of the cryptocurrency as an effective and secure means of payment.
In addition to growing as a form of money, Buterin also highlighted that many users are seeing Ethereum as an alternative for sending and receiving remittances, making international payments, and even saving value; especially in economies affected by inflation. On the other hand, the recent collapse of FTX is also incentivizing users to make transactions on the chain, Buterin noted.
In rich countries, Ethereum and cryptocurrencies are also widely used as a form of private money, since cryptocurrencies are the only ones that currently guarantee their users the benefits of digitalization while respecting a level of privacy similar to that offered by fiat money.
Finally, Buterin mentioned the stablecoins, which were created to counteract the risks of Price volatility in cryptocurrencies.
Ethereum, currently the most important blockchain for the development of smart contracts and decentralized applications (DApps) in the blockchain industry, hosts around 60% of the stablecoins that exist today; according to data from The Block Research.
Source: The Block Research
Among the Ethereum-based stablecoins are the most capitalized in the crypto ecosystem, such as DAI, governed by a DAO, and the centralized stablecoins USDC, USDT and BUSD.
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Decentralized Finance (DeFi)
On decentralized finance, Ethereum’s second most exciting application, Vitalik Buterin wrote that it had become “something of an overcapitalized monster” but was now heading toward a more stable, secure, and valuable ecosystem.
The decentralized stablecoins, like DAI, “are, and likely always will be, the most important DeFi product,” Buterin wrote.
However, other decentralized protocols, such as prediction markets, Creation of synthetic assets and Second layers for trading crypto assets They are also among the current pillars of the decentralized ecosystem.
Digital identity
Another application of interest to Buterin in Ethereum is identity protocols.
The Ethereum co-founder pointed out some of the most important use cases for digital identity, including certifications, authentication, personality tests and the allocation of human readable names.
Buterin stressed, however, that while he is optimistic about blockchain identity, projects and protocols working on this use case need to take a more organic approach and move toward interoperability. “What won’t work is an attempt to create a centralized platform to accomplish all of these tasks from scratch,” Buterin said.
Some of the blockchain identity protocols included in Ethereum are the standard Sign In With Ethereum (SIWE), which allows users to log in and interact with traditional web platforms using a single identity. Also, the protocol Proof of Humanity, which allows users to prove they are authentic humans; a really useful application for governance and airdrops, Buterin noted. Finally, the Ethereum co-founder mentioned POAP, a proof-of-attendance protocol designed to issue tokens representing certifications.
DAO (Decentralized Autonomous Organization)
DAOs are the fourth most exciting application of Ethereum, according to Buterin.
In his post, Buterin highlighted that decentralized autonomous organizations are a powerful element of the blockchain industry, as they allow people to build truly more democratic, censorship-resistant and efficient governments.
DAOs are organizations governed by a smart contract designed to represent a robust or efficient ownership structure or to exert control over some asset or process.
Currently, according to data from the DeepDao platform, there are about 10.500 decentralized autonomous organizationsMost of these DAOs are based on the Ethereum blockchain.
Hybrid applications
According to Buterin, another of the most exciting applications that exist for Ethereum today are hybrid applications.
Today, many blockchain applications are not fully on the blockchain, so they leverage external systems to improve or optimize their processes and models.
Some of these hybrid applications are the voting systems that implement blockchain technology and ZK to preserve the privacy of votes and audit and solvency testing systems (Proof of Reserve), such as those being used by cryptocurrency exchange platforms. The Ethereum co-founder also mentioned other hybrid applications for the blockchain network, such as accounting applications, supply chain management systems, among others.
Buterin concluded his article by stating that many of these applications, while interesting and highly valuable, are currently limited in use due to the technology available. However, blockchain developers continue to build the ecosystem, so it is likely that many of these applications will overcome their limitations in the long term.
Withdrawals on Ethereum Proof of Stake
Meanwhile, the Ethereum development team, in its 99th meeting, agreed to prioritize the withdrawal of staked ethers from the network, which will be included in the next blockchain upgrade, Shanghai, through an Enhancement Proposal (EIP).
Continue reading: Vitalik Buterin shares his vision on Layer 3 protocols
