Ethereum is one of the most popular cryptocurrencies in the world, and it had successfully caught people’s attention when it became the default platform of choice for ICOs (Initial Coin Offerings) back during its peak in 2017. Ethereum has slowly but surely fulfilled its vision to be the decentralized supercomputer, thanks to the active community behind this grand project.
While Ethereum has been used for various purposes and DApps (decentralized applications), one question remains active among the public “Is Ethereum A Currency?” Or perhaps, a more appropriate question would be “Is Ethereum A Real Currency?” Now, let’s discuss that specific question.
Is Cryptocurrency A Real Currency?
Before we get into Ethereum, let’s discuss the broader category. Is cryptocurrency a real currency? Well, let’s define what a currency is. According to a simple google search, a currency is a system of money in general use in a particular country. According to Investopedia, a currency is a medium of exchange for goods and services. It is actually pretty simple.
So, whatever you use as a medium of exchange for goods and services, as long as it is generally accepted by some parts of society, that same thing can be considered a currency. For example, in pre-modern society, many people did not use paper bills for currencies. They used stones or carved woods. They were, technically, currencies as well.
So, in terms of cryptocurrency, yes, we can safely say that it is a real currency, because there are merchants and shops which accept cryptocurrency payment. In many developing countries, you will find retail stores accepting cryptocurrency to pay for their goods and services. In that case, undoubtedly, cryptocurrency is a real currency.
The Relationship Between Ethereum And Other Cryptocurrencies
Ever since Ethereum was introduced to the world in 2013 and finally went live in 2015, Ethereum had gradually increased its popularity among the crypto enthusiasts. Different from many other cryptocurrencies at the time where they were only used for cross-border transactions, Ethereum was able to introduce the idea of using blockchain technology for wider use cases through the utilization of smart contract.
The idea of Ethereum was widely accepted in the crypto space. And thanks to the utilization of Ethereum, nowadays, there are many newer altcoin projects that are running on top of Ethereum blockchain. Usually, they use ERC-20 as their token model (a standard utility token built on Ethereum blockchain).
Nowadays, many stablecoin projects are also utilizing Ethereum. It has become the golden standard of token operation all over the world. It is no wonder why Ethereum has such a massive market cap (only second to Bitcoin). Its use case is very wide nowadays.
Ethereum As A Currency
Ethereum’s native cryptocurrency is called Ether or ETH. However, most people interchangeably use Ethereum as a means to say ETH. And ETH’s most prominent use case is to actually pay for gas fees on the Ethereum blockchain. That means, if you transfer another token (an ERC-20 token or something else), you still need to have a very small amount of ETH to pay for gas fees as the incentive form for the Ethereum miners (or validators in the future).
If you create a smart contract or if you execute a smart contract action, you would also need to use Ethereum. This is the rule of the Ethereum blockchain. The idea is that ETH would have more natural demand as Ethereum blockchain itself gets bigger. In a modern sense, this specific use case means ETH can also be defined as a currency.
Even when it comes to traditional sense, Ethereum is still considered a currency. There are thousands of merchants (both online and offline) that accept Ethereum or ETH as a form of currency. Yes, most transactions are still done with fiat currencies like the US Dollar. Even in the world of cryptocurrency, most people prefer to use Bitcoin instead of ETH. Still though, ETH is a form of currency due to its ability to purchase a lot of goods.
Examples Of Merchants Accepting Ethereum
There are plenty of different products that accept Ethereum as a form of payment. Some of the most apparent examples are Overstock, Cryptoart, LaptopPowerBank.com, Snel.com, and Peddler.com. Yes, most of these merchants are not exactly mainstream e-commerce stores like Amazon, but still, it is quite an achievement to see Ethereum being accepted by these websites.
Keep in mind that some crypto VISA cards might also offer ETH as a form of payment beside Bitcoin and stablecoins. We are still a long way to go until Ethereum becomes a mainstream currency, but at least we are slowly expanding.
To answer the question, “Is Ethereum A Currency,” it is important to note that Ethereum has various use cases. It can be used to pay gas fees, it can be used to pay smart contract execution fees, and more importantly, it can be used to purchase various goods.
There are many people out there who don’t really consider Ethereum as a form of currency because they believe it is not as mainstream as US Dollars or even Bitcoin. But, as mentioned above, as long as some groups of people already see Ethereum as a medium of exchange, you can still see it as a type of currency.