Ethereum, despite being relatively young compared to traditional payment giants such as Visa, has demonstrated remarkable growth and established itself as a formidable force in the blockchain realm. In only a decade, blockchain technology has evolved into a significant player that rivals established financial institutions.
According to recent data from Coingraph, Ethereum processed $3.01 trillion in transactions last year, just shy of Visa’s $3.08 trillion total. This number emphasizes how widely used this emerging technology is, despite its frequent and undeserved associations with cybercriminals, scammers and drug traffickers.
As the second-largest cryptocurrency, Ethereum currently boasts a market capitalization of $227.7 billion, trailing only behind Bitcoin, which has $538.9 billion, and ahead of Tether’s $82.6 billion, according to CoinGecko. This substantial market presence enables Ethereum to power a wide range of disruptive technological solutions that challenge the traditional finance sector. Notable examples include defi, lending, staking and flash loans, among others.
This versatility positions Ethereum as a robust platform with abundant potential for further growth, a distinct advantage over traditional financial systems. Notably, in 2021, Ethereum handled 4.5 times as many transactions as Visa. Additionally, a report by Ethereum Foundation’s Josh Stark revealed that Ethereum outperformed Visa in terms of trading volume, moving about $11.6 trillion, surpassing both Bitcoin’s volume and Visa’s $10.4 trillion.
Analyzing the daily transactions of the most recent cryptocurrency, etherscan reports 968,996 transactions on May 28, 2023, and a record-high 1,932,711 transactions on December 9, 2022. These figures solidify Ethereum’s status as a preferred network for established players seeking to harness the potential of this innovative technology, including Visa.
Last month, Visa leveraged the Goerli testnet, Ethereum’s network for testing cross-client authority proof, to explore free transaction payments through account abstraction. This involved employing a smart contract known as Paymaster, enabling Visa to manage transaction fees directly and execute complex activities on behalf of accounts.
Visa first expressed interest in Ethereum in December, when it unveiled a plan that would allow automatic programmable payments without the intervention of a third party. Furthermore, the company reaffirmed its dedication to cryptocurrencies in March, dispelling rumors of a potential pause in its crypto-related initiatives due to market uncertainties.
As the blockchain ecosystem continues to evolve, Ethereum’s potential for further development and disruption remains substantial. Visa’s active involvement with Ethereum underscores its recognition of the blockchain’s potential and aligns with the growing interest from other prominent players within the financial industry.
The growing volume of transactions handled by Ethereum suggests that industry companies such as Canaan Inc. (NASDAQ: CAN) could deepen their footprint further since the public is becoming more comfortable using cryptos.
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