Blockchain Investor Analysis

Ethereum

ETH
Current Price $244.44 (+0.83%)
Ethereum ushered in the blockchain 2.0 era by enabling the creation of smart contracts and by providing developers with a platform to build decentralized applications. Today, Ethereum is the second-largest blockchain network after Bitcoin.

Our Rating:

Market

Problem that it solves

Ethereum was launched to enable developers to create smart contracts and build decentralized applications to usher in a new decentralized digital economy.

Customers

Ethereum's customers are typically businesses looking for enterprise solutions or startups looking to build DApps.

Value creation

The appealing aspects of the Ethereum blockchain, which include smart contracts and programmability, are accessible via the usage of the ether (ETH) token. Therefore, the token should derive value from the overall success of its blockchain.

Market structure

The market for Ethereum applications is still in early stages. However, Ethereum has managed to attract startups as well as large corporations to its network.

Market size

As of 2020, the market for Ethereum solutions is still relatively small. However, the upside potential is substantial.

Regulatory risks

Ethereum has faced scrutiny from US regulators in the past for their token presale, claiming that it emulated a securities offering. However, no steps have yet been taking to classify ETH as a security.

Average Market Score

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Competitive Advantage

Technology/blockchain platform

Programmers have been building DApps, smart contracts, and other tokens on this platform longer than any other smart contract-enabled blockchain. However, Ethereum's planned upgrades may test the rubostness of the platform and create some uncertainty.

Lead time advantage

Ethereum had a significant lead time advantage, but their lead has evaporated and they now face significant opposition from other projects. Many critics claim that Ethereum's road map is simply too long compared to their peers.

Contacts and networks

Vitalik Buterin, the creator of Ethereum, has existed in this industry for a number of years and has access to one of the best networks in the market.

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Management Team

Entrepreneurial Team

Ethereum has some of the most experienced developers in the industry working on the platform and its frontman, Vitalik Buterin, is considered by many as a blockchain Wunderkind.

Industry/technical experience

The team definitely has thousands of hours of experience considering they launched in 2014.

Integrity

The infamous DAO hack in 2016, which led to a fork to recuperate stolen funds did not go down well in the crypto community as it suggested a degree of centralization and 'a few people' in charge. However, in comparison to many other leading projects, Ethereum's leaders have largely demonstrated that they are clear about their vision for Ethereum and how they will achieve it.

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Token Mechanics

Token required

In order to interact with the Ethereum economy, you must use ether (ETH) to pay fees, known as gas. The token is like the fuel to the blockchain, ensuring that the motor keeps running.

Value added

The Ethereum token adds value in that it is required to interact with the blockchain network.

Decentralized

Ethereum has a high level of decentralization compared to many of its peers.

Token supply

Ethereum currently doesn't have an issuance limit or a defined monetary policy for ether. Per its initial presale in 2014, ether capped its limit to 18 million per year. It has no known maximum token supply.

Public exchange

Ethereum can be found on nearly any major exchange in the world. It remains one of the most accessible tokens on the market.

MVP

Ethereum has had an MVP for over half a decade as of 2020.

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User Adoption

Technical difficulty

Ethereum prides itself on user-friendly blockchain services. However, the Ethereum blockchain is not as simple to understand conceptually as a digital currency network, for example.

Halo Effect

Ethereum created the Ethereum Enterprise Alliance, a program designed to customize ethereum for major industry players. JPMorgan Chase &Co. (JPM) is a member, as are Microsoft Corp. (MSFT) and British Petroleum (BP).

Buzz

Ethereum is one of the most talked-about projects on social media (and in mainstream media) as it is the leading smart contract computing platform.

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Overall Score

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Blockchain Investor Analysis

Ethereum is one of the most promising blockchain projects the market has to offer. As a result, the market value of ether (ETH) is in the billion.

If Ethereum manages to successfully implement its planned network upgrades, it has the potential to remain the market-leading smart contract platform in the years to come.

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