Ethereum is such a beautiful invention. Unlike the first generation of blockchain, Ethereum can be used for various use cases – which include creating DApps, multi-signature smart contracts, ICO or IEO token creations, and even tokens that represent other values such as stablecoins, stock market, equity, and other purposes.
The wide use case of Ethereum makes it a kind of cryptocurrency with multiple purposes. It is not very easy to answer “What is Ethereum used for?” when you have at least 6-7 different use cases for it.
Ethereum As A Payment Tool
There are many websites where you can purchase goods and services with Ethereum. One of them being Overstock.com – a website where you can buy furniture. Other websites include Snel.com, Peddler.com, Cryptoart, Bitgild, and 1000 EcoFarms. The majority of these websites are not famous big websites. You might not even recognize them in the first place.
That does not mean Ethereum cannot be used as a payment tool. Yes, even though Ethereum is not mainstream yet, it is still a payment tool. As long as there are a decent amount of websites accepting Ethereum as a form of payment, it is still useful as a form of currency.
Ethereum As A Token Issuance Platform
Due to its native capabilities to process smart contracts and issue tokens, many crypto startups chose to issue their own token on Ethereum blockchain in the form of ERC-20. That means they could easily create their own crypto token without the need to create their own blockchain.
Yes, nowadays, you can also do this same thing on other smart contract platforms such as on EOS or Tron, but Ethereum has a first-mover advantage. Whenever you hear someone is trying to issue his own token for the sake of his ICO (Initial Coin Offering) or IEO (Initial Exchange Offering), usually the same individual issues the token on Ethereum.
This trend has continued even until today. Yes, almost all new pre-mainnet crypto tokens are issued directly on Ethereum. Some of the newer altcoin projects even chose to launch their mainnet with Ethereum because they understand the competition if you release your own blockchain is simply too difficult.
Ethereum As The Trustworthy Platform For Stablecoins
The first stablecoin that was issued in the blockchain platform was Tether. At the time Tether was launched in the form of OMNI, which is based on Bitcoin blockchain. However, all the other popular stablecoins that came after Tether (USDC, TUSD, PAX, or DAI) were all issued on top of Ethereum blockchain.
This trend has forced Tether to also issue its own ERC-20 version of its stablecoin. So, nowadays, the majority of popular stablecoins are all operating on top of Ethereum. Due to the increasingly popular trend of hiring freelancers from other countries, the use cases of stablecoin have expanded greatly as well. It is actually cheaper and more cost-efficient to send USD payments through stablecoin compared to paypal or other mediums. And fortunately, Ethereum is at the frontline of this service.
Ethereum As Multi-Sig For Company Operations
Nowadays, Ethereum can also be used as a multi-sig wallet for company operations. This is a pretty big deal for the blockchain space. As mentioned above, Ethereum is now the go-to platform for issuing and operating stablecoins. And for this exact reason, many crypto startups and blockchain companies can actually manage their operation wallets with Ethereum.
For example, rather than holding $1 million USD in the bank account, they can just manage the same $1 million USD in the form of USDC or PAX in a multi-sig smart contract address. And because of the nature of multi-sig, several people are required to sign each outgoing transaction. It is safer and more cost-efficient for a company with remote team members. Also, by knowing that nobody can move the money without all the team members’ approval, it gives much bigger peace of mind for the whole team.
With a multi-sig, a smart contract address is linked to each individual’s personal wallet address. For example, when there are 5 people who own the same multi-sig smart contract address (and assuming each outgoing transaction requires 4 approval out of 5 team members), that means four individuals need to sign each outgoing transaction from their own personal wallet addresses.
Ethereum As The Biggest DApp Ecosystem
Ethereum is also used for DApp creations. According to many available stats out there such as dappradar, Ethereum is the biggest DApp community on the planet. There are various DApps (decentralized applications) that have been operating on Ethereum. The biggest example is MakerDAO. It is a decentralized lending facility that issues the popular decentralized stablecoin, DAI.
On Ethereum, there are also plenty of decentralized exchanges that execute smart contracts to operate automatically. Other types of DApps include video games and gambling applications. The competitions to Ethereum, such as Tron and EOS are not even close. Yes, they have DApps too but usually only in a few amount of categories such as gaming and gambling. Most financial DApps on other platforms are not really popular and still far away to achieve what Ethereum has achieved.
So, what is Ethereum used for? There are plenty of use cases, as mentioned above. Ethereum is used for stablecoin issuance, initial token (pre-mainnet) token issuance by many companies, payments, and for powering DApps and various kinds of smart contracts. Ethereum is a cryptocurrency with the widest use cases as of now, and they might be able to maintain that status quo for many years to come.
The future looks very bright (for example, with the upcoming Ethereum 2.0 launch), and it will be a matter of time until Ethereum can finally fulfill its vision as the decentralized supercomputer.