Ethereum Is Driven by Utility and Functionality

Ethereum-Is-Driven-by-Utility-and-Functionality
  • Ether is the native asset of the Ethereum platform.
  • Transferring Ether from one wallet to another is relatively inexpensive.
  • People want to hold Ether similar to how people want to hold oil.

Ether is the native asset of the Ethereum platform, meaning it’s used in order to process any transaction or state change on the blockchain. Users and developers use Ether as “gas” in order to “fuel” the applications that run on Ethereum; this “gas” is sent to the miners as a reward for validating the transaction.
Each computation has a set gas price, meaning that the more complex the transaction, the more expensive it’ll be. For example, sending Ether from one wallet to another is relatively inexpensive compared to doing a flash loan to take advantage of a DEX liquidity pool arbitrage opportunity.

Since Ether is used as gas for the network, it intrinsically has utility vs. a pure currency/store of value like Bitcoin. Thus, people want to hold Ether similar to how people want to hold oil in order to power machinery. As the Ethereum network is used more and more, the demand for Ether will increase. And as mentioned previously, the network is constantly breaking ATHs in terms of network traffic and transactions.

Ethereum also has a ton of utility vs. other blockchains. It’s the most popular platform for building decentralized applications (apps) and supports smart contracts, which allow developers to create unique experiences that couldn’t exist on traditional centralized platforms like the App Store or Google Play Store.

There are currently over 14,000 decentralized apps (dapps) built on Ethereum, with popular games like CryptoKitties, Gods Unchained, and Decentraland gaining mainstream attention. These games are built on Ethereum’s ERC-721 standard, which allows for the creation of non-fungible tokens or NFTs.

NFTs are a big deal because they’re a new asset class that’s completely unique and different from any other asset in the world. They’re also scarce meaning there’s a limited supply which makes them valuable.

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Godfrey Mwirigi is an enthusiastic crypto writer with an interest in Bitcoin, blockchain, and technical analysis. With a focus on daily market analysis, his research helps traders and investors alike. His particular interest in digital wallets and blockchain aids his audience in their day-to-day endeavors.

programmer & freelance writer