The Applications of Cryptocurrency: Evidence from Ethereum

Abstract

Cryptocurrency (e.g., Ethereum and its currency Ether) presents an opportunity to completely change the way money is transacted, which perhaps even redefines the money. On this basis, this paper will investigate and discuss the basic principles and corresponding applications of Ethereum. As a matter of fact, operating on a decentralized platform while also using the global reach of the internet, transactions can be made with little cost, without interference of intermediaries and government intervention. Besides, it will keep the personal information of the user private. In addition, according to the analysis, each user can define how they use ether as they please, e.g., using Ethereum to store assets like art and reselling them through Ethereum. However, Ethereum still has many issues to fix ranging from security risks, privacy risks, and perceived stability due to Ethereum’s notorious volatility and previous illegal activities from other platforms (e.g., Bitcoin). More research is required to distinguish whether Ether can be a viable alternative that could be added to the economy or even completely replacing traditional money altogether and address the current concerns. These results shed light on guiding further exploration of cryptocurrency.