29 Jun 2022 · 3 min read

Ethereum Is Business-ready, Says Foundation-linked Body, but ‘Caveats’ Remain

Source: Adobe/sorapop

 

The authors of a new report claim that Ethereum (ETH) is “ready” for use in the world of business – albeit with “some caveats.”

The report was compiled by the Ethereum Enterprise Alliance (EEA) – a business-focused affiliate of the Ethereum Foundation. Its authors claimed that while the “pieces are in place” for “the safe and productive use of Ethereum as a business platform,” the aforementioned pieces do not yet “necessarily fit together seamlessly.”

In a press release, the EEA’s Executive Director Dan Burnett was quoted as stating that the body’s “analysis and examples” showed that “the pieces are now in place in the Ethereum ecosystem for the safe and productive use of this technology as a business platform.”

The report’s authors, who provided a number of case studies to back up their claims, wrote that Ethereum was a “safe and productive” business platform that has “matured greatly” and was now a “battle-tested and “globally significant settlement layer.”

They explained that the “important thing for businesses to keep in mind in this context is that Ethereum is a complete ecosystem,” writing:

“Compared to its early days, there is a rich assortment of standards, tools, providers, and platforms that businesses can turn to.”

In addition to the mainnet, sidechains and Layer 2 (L2) solutions help provide the “sustainability, performance, and privacy” that some companies will likely hanker after.

Although they conceded that the “regulatory environment for digital assets and blockchain technology (as opposed to cryptocurrencies)” was still far from stable “in many respects,” they claimed that this “need not be seen as a blocker.” They added that “many jurisdictions” now “see the potential of blockchain and look favorably on it.”

While all the ingredients are in the kitchen, though, no chef has yet managed to blend them together, the authors indicated. Critics have often claimed that Ethereum suffers from scalability problems. 

The authors admitted that scaling solutions and other tools are “relatively new, and carry the risks associated with any new technology or platform.”

They also mentioned the issue of interoperability, admitting that the world was “yet to see the rise to prominence of comprehensive development and deployment suites that are often to be found in more mature technologies and that can be used to seamlessly bind all the pieces together into a whole.”

But, they claimed, developers were aware of this issue. The authors asserted that the situation on this front would “improve over time.”

What Ethereum can offer its users, the authors continued, is flexibility – in the form of multiple “options for setups based on business type and needs.”

For instance, they explained that while the Ethereum mainnet “scores high on usability and interoperability for tokenization,” projects that require high levels of performance and regulatory compliance might prefer to work with Layer 2 solutions or sidechains – or even build an Ethereum-based private network.

In the payments sphere, too, the authors claimed that moving away from the mainnet could provide solutions for “high-volume use cases,” including retail, or industries “where privacy and regulatory compliance are high priorities” such as the financial services sector. Again, this would allow businesses who “rely on L2s or sidechains to reduce network costs and gain scalability.”

They wrote:

“In its early days, Ethereum promised to support decentralized business and collaboration through, among other things, tokenization and smart contracts. Today, this promise is becoming a reality.”

Furthermore, they claimed that there was no shortage of incentives for companies to “explore” Ethereum-based decentralized business models and “processes of the type Ethereum makes possible.”

They claimed that tokenization and smart contracts allow digital assets to be “uniquely and verifiably represented.” Smart contracts, they argued, mean that “agreements about these digital assets can be programmed, validated, and executed by machines more quickly and accurately and cost-effectively than by humans alone.”

This, they said, would allow companies to slash overheads, as well as develop new “cost-effective” products and services.
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