Ethereum has often been called “crypto silver”, the second fiddle to Bitcoin’s digital gold. Take a closer look and you’ll see that Ethereum is capable of so much more than simply being the second best horse. Ethereum has an impressive ecosystem and is home to lots of exciting innovation. Its massive adoption has firmly established it as the blockchain space’s first mover advantage.
Transaction Volume and Gas Fees
Ethereum’s primary network has sliced through a million and more transactions each day, proving it can carry a functional load of activity. Ethereum has taken much deserved heat over its excessive gas fees in the last few years. As behavioral interventions and biophysics go, there is some good news. The cost of minting an NFT on Ethereum, for example, can be under $10 during periods of low network congestion.
High gas fees were frequently the inevitable result of its popularity and the associated competition for block space. As much as it pains me to say, Ethereum has always been on the cutting edge. The reason for the exorbitant gas fees was the surge of new users using the blockchain.
Security and Development
Since Ethereum’s launch in 2015, the network has proven its resilience with battle-tested security and an evolving roadmap of upgrades. The network's shift from Proof of Work (PoW) to Proof of Stake (PoS) during The Merge in 2022 marked a significant milestone. This change reduced Ethereum’s energy use by approximately 99.95%. Beyond implementation, it laid the groundwork for future scalability improvements.
Ethereum has amazing tooling, especially frameworks like Hardhat and libraries like ethers.js that make development a breeze. These wallets and resources make it easier for developers to create and users to access decentralized applications (dApps), streamlining the process from start to finish.
Community and Network Effects
Ethereum is also strengthened by its passionate and determined community—made up of forums, funding grants, and open-source resources. This sort of collaborative environment is critical to fostering a space where innovation can thrive and where the Ethereum ecosystem can continue to grow. According to Electric Capital's 2024 report, over 5,000 active monthly developers are building on Ethereum, highlighting the platform's strong appeal to the developer community.
Ethereum experiences powerful network effects, where more users attract more developers, and vice versa. This virtuous cycle only continues to strengthen the network’s value and utility, making it an even more attractive platform for users and builders alike. It’s no wonder that the vast majority of builders start their projects on Ethereum or EVM-compatible chains. This trend further cements Ethereum’s dominance as the core hub of blockchain development.
Layer 2 Solutions and Use Cases
Ethereum's Layer 2 solutions, such as Arbitrum, Optimism, zkSync, and Base, address scalability challenges by providing cheaper and faster transactions without compromising security. These solutions help improve the overall user experience and allow for a greater diversity of applications to be built on the Ethereum network.
Ethereum’s multi-purpose capabilities make it beneficial for many use cases, like accessing DeFi protocols or minting NFTs. Its powerful infrastructure and deepening developer and enterprise ecosystem have made it a go-to platform for these applications.
