Ethereum recently announced EthEnt, which is a foundational template for large corporations to collaborate and build on top of the Ethereum Blockchain. There has been a lot of hype around this new formation as the price of Ether has risen to almost $20 after the announcement. The partners include JP Morgan, BP, BBVA, and more.
This is not the first Blockchain consortium. We have been seeing large companies come together to collaborate on utilizing Blockchain tech for over a year now. So, what makes EthEnt unique? Why was this one New York Times worthy? Do we really understand the implications?
In 2014 Ethereum did a public token launch and approximately $16M was donated to build the project. Currently, with a market cap of close to $2B, we can see that this project has already caused some serious ripples in the cryptocurrency/Blockchain landscape. So what makes Ethereum unique?
Aside from being simply a store of value and a medium of exchange, the digital protocol token known as Ether has the ability to execute smart contracts, or blocks of code designed to execute a wide spectrum of possible transactions. The transactions can range from a simple escrow storage, all the way to the most complicated derivatives of digital tokens also created through smart contracts. Like Bitcoin, Ethereum has, up until this point, been a completely public Blockchain.
EthEnt vs R3 and Hyperledger
As previously mentioned, EthEnt is not the first consortium/protocol focused on Distributed Ledger Technologies. We have seen many large banks and corporations partner with R3, who is in the process of releasing Corda to make settling transactions and private contract creations much more smooth between banks. They have recently admitted that they don’t utilize a Blockchain because they don’t need one (this highlights the lack of needed resiliency when operating in tandem with government). This doesn’t mean that the project isn’t good. It will still definitely make settlement times more effective, and create more opportunity for interbank trading.
Hyperledger is another project similar to Corda, but again lacking a public Blockchain. Having a few distributed nodes is definitely an improvement to old standards, but tends to serve limited parties. Ethereum and Hyperledger may actually start to merge due to an intelligent partnership structure with Monax.
Collaboration vs Competition
Banks exist to make more money from the money that they’ve stored of other people (while often not even taking into consideration the clients). Large energy companies exist to provide the most limited amount of power/resources for the most amount of money. We could make the case that this is not the best way to store our wealth or to acquire energy resources, and that people should in fact be their own banks/marketplaces. But, considering how banks and other large corporations aren’t handing over their power willingly and embracing a more beautiful paradigm (and for some reason people as a majority aren’t yet feeling the desire to transition more fully to cryptocurrencies), a transition onto protocols such as Ethereum is a forward step in this process of transformation.
Not only are the banks now participating in the cryptocurrency ecosystem by utilizing ETH (even though they might have private chains), but this is a meaningful step towards integrating fiat currencies with cryptographically valued assets. With enough time and transacting, fiat and crypto will be almost indistinguishable.
Into the Imagination
So, banks are going to operate on Ethereum. The digitization of assets is starting to occur at a rapid pace. Some fiat is devaluing itself naturally, and other fiat is making its way onto public or private Blockchains. The entire financial landscape is rapidly shifting, and Ethereum seems to be presenting one of the most viable long-term solutions for well.. just about everything. Code bases and the ability to execute complex financial transactions are starting to become the foundation of new financial entities. With projects like Augur, uPort, and Akasha coming on to the scene, the way we interact with applications is also rapidly shifting.
The intersection of finance with energy and healthcare (and everything else) is rapidly approaching, and smart contracts on Ethereum can make these processes seamless. Operating on proprietary closed looped systems is going to be more fractured, especially when spanning multiple sectors of the economy in one smart contract.
EthEnt feels like a very natural evolution from the current situation across various sectors of the economy. More interaction with clients through smart contracts makes sense from the perspective of health, banking, and energy companies. It will be interesting to see how corporations adapt in this evolving ecosystem when traditional services such as banks accounts are no longer needed, energy is available from multiple sources, and healthcare is not limited to the opinion of your local doctor.