Why Every Company Will Become a Fintech Company | Future: Own the Internet

Why Every Company Will Become a Fintech Company | Future: Own the Internet

Ethereum has emerged as a powerful force in the world of blockchain and cryptocurrencies. It is not just a digital currency, but a platform that allows for the creation of decentralized applications and smart contracts. This has positioned Ethereum as the "value layer" of the internet, where apps and products can be built with money baked into the code.

Owning Ethereum (ETH) is akin to owning shares in the internet itself. As the demand for web3 adoption increases, the demand for ETH will also rise. Additionally, upcoming changes to the Ethereum network will decrease the supply of ETH, allowing more value to accrue to its holders. This makes ETH a unique combination of a tech stock, a bond, a ticket to web3, and money all rolled into one.

In comparison, Bitcoin operates as a database, specifically a distributed ledger of transactions. Its primary function is to track ownership of bitcoin (BTC) and facilitate transactions between users. Ethereum, on the other hand, is Turing complete and programmable, enabling the creation of decentralized applications and a wide range of use cases. This flexibility has presented some early usability challenges for Ethereum, but it also allows for a broad array of possibilities.

Two key similarities between Bitcoin and Ethereum are their Turing completeness and composability. Turing completeness means that both blockchains can solve any reasonable computational problem. Composability, in the case of Ethereum, refers to the ability to chain together smart contracts to build increasingly complex applications more quickly. This flexibility and composability are what make Ethereum a powerful platform for decentralized finance (DeFi) apps, NFT marketplaces, DAOs, and more.

However, Ethereum is not without its challenges. It has been criticized for being slow, expensive, volatile, inflationary, environmentally unfriendly, and inefficient. To address these issues, Ethereum is undergoing a major shift from a Proof of Work (PoW) consensus mechanism to a Proof of Stake (PoS) system. PoS will allow ETH holders to validate block transactions based on the amount of ETH they hold, making the network more secure and energy-efficient. Critics argue that PoS may centralize power in the hands of those with the most ETH, potentially compromising decentralization and security.

Looking to the future, Ethereum has the potential to become a triple-point, ultra-sound money capital asset. It can serve as a store of value, collateral for DeFi transactions, and a capital asset that earns holders high annual percentage rates (APR). The value of ETH will likely increase as transaction fees decrease, transaction times improve, and demand for Ethereum-based applications grows.

While Ethereum faces challenges and competition from more centralized solutions like Binance Smart Chain, its unique network effects and alignment of incentives make it a strong contender in the blockchain space. Ethereum's platform network effect is unlike any other, as projects built on Ethereum have a financial incentive to support the value of the underlying blockchain for their own security and success.

The disruption occurring in the financial services industry is also worth noting. Infrastructure "as a service" is bringing monumental changes to the way financial services are offered. Core systems, payment integrations, and compliance with anti-money laundering laws are all being transformed by technology. This presents new opportunities for financial services companies to improve their offerings and for existing services to become better.

In conclusion, owning Ethereum is like owning a stake in the future of the internet. Its unique properties as a programmable blockchain and the value layer of the internet make it a compelling investment. While Ethereum faces challenges and competition, its network effects and potential for growth make it a strong contender in the blockchain space. Before concluding, here are three actionable pieces of advice:

1. Consider diversifying your cryptocurrency portfolio to include Ethereum. Its potential for growth and its position as the value layer of the internet make it a valuable asset to hold.
2. Stay informed about upcoming changes to the Ethereum network, such as the transition to Proof of Stake and improvements in scalability. These changes can impact the value and usability of Ethereum.
3. Explore opportunities in the emerging field of decentralized finance (DeFi) and other applications built on Ethereum. These applications can offer unique financial services and investment opportunities.

With the continued growth of the internet and the rise of blockchain technology, Ethereum is poised to play a central role in the future of the web3 ecosystem. By owning Ethereum, individuals can participate in this transformative shift and potentially reap the benefits of its increasing value and utility.