Altcoins

How Is Ether Being Used By Ethereum Users?

JP Buntinx | May 22, 2016 | 7:00 pm
Ethereum
Altcoins

How Is Ether Being Used By Ethereum Users?

JP Buntinx | May 22, 2016 | 7:00 pm

Ethereum has been getting a lot of attention in recent times, yet it remains unclear as to why people use this cryptocurrency so often. With the network surpassing 40,000 transactions per day, there have to be some legitimate use cases for Ether. But where’s the money going?

Figuring Out The Use Cases For Ethereum

For Bitcoin users, it is apparent the cryptocurrency can be used in a variety of ways, ranging from paying for goods and services to payroll and everything in between. But when it comes to Ethereum, these use cases are not so obvious, yet there are over 40,000 transactions on the network every day.

The DAO is cause for great excitement among Ethereum enthusiasts these days, and there is a lot of funds flowing from user wallets to the wallet address for this project. Additionally, over 100,000 transactions have been generated by The DAO for internal transfers, as the project is currently in its creation phase.

Similar to Bitcoin, Ethereum enthusiasts will use Ether to pay for transactions and split bills among one another. Every ETH in circulation has a value, just like every BTC has. Additionally, the lower transaction fees may have swayed the minds of some Bitcoin users to use Ethereum instead for particular transactions.

One thing to keep in mind is how there is a lot of Ethereum trading taking place every day, and there are many platforms involved where users can do so. Every sell and buy order is a transaction in is own right, and those numbers will add up over longer periods. Then again, the same can be said for Bitcoin, so this is not a complete surprise either.

Other use cases for Ether range from prediction markets – such as Augur and GroupGnosis – as well as running Dapps. Although the number of Dapps is growing in the Ethereum ecosystem, they do not produce dozens of transactions per hour each. Every small bit helps to give the transaction numbers a boost.

Last but not least, there is still a lot of Ethereum mining taking place on a daily basis, and mining pools have to pay out their users as well. Considering how there are a lot of people involved in this process, mining payouts can split into multiple transactions for nearly every block. Some people estimate one-third of all ETH transactions are a direct result of mining payouts, although that might be slightly overestimated.

Source: Reddit

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