Move over bitcoin — there's a newer digital currency in town gaining more attention.
That's bitcoin's latest rival on the market, known as Ethereum. And its attention is probably warranted, as its value has jumped 1,000 percent in three months, according to a report from The New York Times' Nathaniel Popper.
Beyond its value, though, the virtual currency is garnering attention from bigwigs in the financial and tech sectors, such as JPMorgan Chase, Microsoft and IBM — three companies that have shown interest in blockchain's technology. It's also been dubbed by some as bitcoin 2.0.
But where bitcoin's possibilities end, Ethereum's begin. Outside of acting as a virtual currency, it also has the potential to provide smart contracts for online markets. But, as the report notes, this virtual currency is still in its early days and could have the same growing pains that bitcoin has faced.
Security problems of the complicated software, for one, have been mentioned by bitcoin supporters. And the possibility of other issues, like being a source for fraudulent contracts (Ponzi schemes), could be another one that some suggest could be integrated into the software of Ethereum itself.
But there are also possibilities in the software, some companies have suggested. IBM has suggested that Ethereum could be used in the Internet of Things market. Microsoft has views on how it could be used on its computing cloud.
“Ethereum is a general platform where you can solve problems in many industries using a fairly elegant solution — the most elegant solution we have seen to date,” Marley Gray, a director of business development and strategy at Microsoft, told Popper.
The rise in interest in Ethereum comes as more attention has been put on the blockchains, including by major banks, who have experimented with how to use blockchain's tech to move and trade money faster and easier. Ethereum has been one of the options banks are looking at. But, for now, it's still in experiment mode.
As for the future?
“Bitcoin is still probably the safest bet, but Ethereum is certainly number two, and some folks will say it is more likely to be around in 10 years,” Joseph Bonneau, a computer science researcher at Stanford, told NYT. “It will depend if any real markets develop around it — if there is some actual application.”