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Despite some skepticism, there are five compelling reasons that Ethereum has a bright future, as shown by the balance. perspective.
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Better ecosystem compared to Bitcoin L2:
Bitcoin Layer 2 (L2) applications are in development, but currently lag behind Ethereum in terms of functionality and user experience. Ethereum has established itself as the preferred platform for developers, primarily due to its more mature ecosystem and wide acceptance. Despite all the buzz surrounding Bitcoin's potential for application development, Ethereum continues to be the go-to for developers looking for a robust, tested, and versatile solution.
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Regulatory challenges may not be significant.
There is a lot of talk about the possibility of the U.S. Securities and Exchange Commission (SEC) classifying Ethereum as a security. However, the outcome of this regulatory scrutiny remains uncertain. Even if Ethereum faces some regulatory hurdles, its indispensable role in the financial and technology space, supported by significant support from large technology companies and traditional finance (tradfi) asset managers, It suggests that Ethereum can withstand potential challenges.
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Scalability and conflicts with Solana:
Solana is emerging as a more scalable blockchain platform with faster application growth. However, its scalability benefits come with technical risks and a less diverse client base compared to Ethereum.
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Recruitment by major financial institutions:
Major financial institutions such as Visa, MasterCard, JP Morgan, and Citibank are considering blockchain solutions separate from Ethereum. However, Ethereum's interoperability and established network could eventually attract these giants. Blockchain's ability to operate on a trustless, global scale makes it an attractive backbone for future financial operations.
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Symbiotic relationship with Layer 2 solutions:
There is a misconception that value primarily accrues to layer 2 technology rather than Ethereum itself. In reality, Ethereum and its Layer 2 solutions have a symbiotic relationship. The success of applications running on Ethereum's network increases the value of the core platform, just as it benefits from the businesses that railroads enable.
About the author
Armand Sirignan
