Indeed, Ethereum (ETH) has been attracting the interest of not only investors but also businesses looking to leverage its capabilities. Industry experts suggest that enterprise adoption of Ethereum is gaining momentum.

Large companies have previously explored and experimented with Ethereum’s technology and smart contract capabilities. However, the recent trend indicates a growing interest in utilizing Ethereum for various business purposes.

One indicator of the increasing activity on the Ethereum network is the rising number of transactions on the Ethereum mainnet. Data from L2BEAT, a layer-2 (L2) insights platform, shows a steady increase in transactions on the Ethereum network throughout this month.

Layer-2 solutions are built on top of the Ethereum mainnet and aim to address scalability challenges by processing transactions off-chain or in a more efficient manner. These solutions can enhance transaction throughput and reduce costs, making Ethereum more viable for businesses.

The rising transaction volume on the Ethereum mainnet suggests that more businesses are utilizing Ethereum’s infrastructure for their operations. It signifies a growing recognition of Ethereum’s potential and its ability to support a wide range of decentralized applications and use cases.

As Ethereum continues to evolve and address scalability concerns through upgrades like Ethereum 2.0 and the adoption of layer-2 solutions, it is expected that more businesses will explore and integrate Ethereum into their operations.

The increasing interest from both investors and businesses indicates a positive outlook for Ethereum’s growth and adoption in the coming years.

Source: L2BEAT

Ethereum Solidifies Position as the Dominant Enterprise Platform

According to Paul Brody, the Enterprise Ethereum Alliance Chair and Global Blockchain Leader at EY, Ethereum has emerged as the dominant enterprise platform. He stated that most of the substantive concerns around Ethereum have been addressed, including the issue of high gas fees.

Brody highlighted the significance of the recent Denouement (Dencun) upgrade, which went live on March 13. This upgrade prepares the groundwork for protodank sharding and helps to lower Ethereum’s layer-1 fees. Lower gas fees are particularly important for enterprises that anticipate handling millions or even hundreds of millions of transactions, as it reduces the cost burden associated with operating on the Ethereum network.

Scalability and low gas fees are crucial for accommodating high volumes of business transactions. Brody also mentioned that the Ethereum layer-2 (L2) ecosystem is maturing. L2 solutions are starting to differentiate and serve more specialized purposes, including catering to the specific requirements of enterprises.

Brody specifically mentioned EY’s L2 solution, known as “Nightfall,” which has been addressing a specific business problem since its inception in 2019. Nightfall takes into account enterprise privacy requirements and includes an “Enterprise Identity Certification” feature. This ensures that only authorized enterprises can access the L2 network, preventing anonymous money transfers and requiring legal registration and compliance from all participating entities.

By addressing enterprise privacy concerns and incorporating identity certification, Nightfall provides a critical feature for businesses utilizing Ethereum. It adds an extra layer of security and regulatory compliance, making it suitable for enterprise use cases.

Overall, Brody’s observations indicate that Ethereum has made significant progress in addressing scalability, gas fees, and enterprise-specific requirements. These developments are likely to further drive the adoption of Ethereum by businesses in various industries.

Microsoft Advances Ethereum Development Initiatives

Companies that have already started utilizing Ethereum for business purposes are continuing to make advancements in their implementations. Microsoft, for example, has been leveraging blockchain for supply chain management since 2019, and according to Yorke Rhodes, Co-Founder and Director of Digital Transformation for Blockchain at Microsoft, the company completed a major internal release related to this effort last year.

Rhodes explained that Microsoft has implemented a financial controls layer on top of its Quorum Blockchain Service, which is designed to support multiple ledger protocols and is built on ConsenSys Quorum’s Ethereum ledger using the Istanbul Byzantine Fault Tolerance (IBFT) consensus mechanism. This financial controls layer enables Microsoft to perform “just in time payments,” which has significant value in terms of reducing the cost of capital. The implementation focuses on ensuring traceability and financial controls for high-value chips that power Microsoft’s cloud infrastructure, which involves substantial capital expenditure on an annual basis.

In addition to supply chain management, Microsoft is exploring Ethereum implementations in other areas. The Microsoft Edge browser team is currently conducting early tests of a new Ethereum implementation. The Microsoft Edge browser already has a built-in wallet that allows individuals to hold Microsoft account information and billing details. The team is now adding crypto wallet features to the browser wallet, and this functionality is currently being tested in Brazil.

Interestingly, Rhodes mentioned that the code being tested has been present in the browser wallet for about two years but is now being iterated upon and tested in Brazil’s regulatory-friendly environment. This suggests that Microsoft is actively working on integrating Ethereum-related features into its products and services, catering to the growing interest in cryptocurrencies and decentralized applications.

These developments underscore the increasing adoption and exploration of Ethereum by major companies like Microsoft, showcasing the expanding use cases and potential of the Ethereum ecosystem in enterprise settings.

Enterprise Ethereum Alliance Raises Awareness for Ethereum Adoption

The Enterprise Ethereum Alliance (EEA) plays a significant role in promoting and advancing enterprise adoption of Ethereum. As a global standards organization for enterprise blockchain, the EEA aims to raise awareness and provide reliable information about enterprise Ethereum as the blockchain ecosystem continues to mature.

Karen Scarbrough, the Executive Director of the EEA, emphasized the organization’s mission to serve as a credible voice of reason for enterprises. This means that the EEA strives to be a trusted source of information and guidance, offering enterprises a clear understanding of Ethereum and its potential applications in their business operations.

By establishing standards, best practices, and frameworks, the EEA helps streamline the adoption of Ethereum within enterprises. It provides a platform for collaboration, knowledge sharing, and the development of industry-specific solutions. The EEA’s efforts contribute to creating a more robust and interoperable ecosystem for enterprise Ethereum.

As enterprise interest in blockchain technology grows, having a reliable and authoritative organization like the EEA can be instrumental in fostering confidence and facilitating the adoption of Ethereum by businesses. By promoting standards and providing accurate information, the EEA aims to support enterprises in navigating the complexities of Ethereum and realizing its benefits in their respective industries.

 

Karen Scarbrough, the Executive Director of the Enterprise Ethereum Alliance (EEA) and Senior Technical Program Manager at Microsoft, shared insights regarding enterprise readiness for Ethereum and the importance of the EEA’s Ethereum Business Readiness Report.

Scarbrough mentioned that during her time at energy company BP, she had opportunities to engage consultants to learn about private blockchains. However, she noted that a similar level of enterprise readiness is not yet available within the Ethereum layer-2 (L2) environment. While L2 solutions are gaining traction and maturing, there is still a need for more guidance and understanding of their capabilities and implementation.

To address this, the EEA released the Ethereum Business Readiness Report in December of the previous year. The report aims to showcase successful examples within the Ethereum ecosystem and serve as a guide for companies seeking information about L2 solutions and other aspects of enterprise Ethereum. It provides valuable insights into real-world use cases and their potential applicability in various business environments.

Scarbrough highlighted Coinbase’s L2 ecosystem called Base as an impressive example of success. Coinbase has been driving developer activity within Base and enabling real-world use cases, which serves as a positive data point for the Ethereum ecosystem. Scarbrough emphasized the importance of such information reaching industries beyond digital technologies, as it requires active outreach from the Ethereum ecosystem to ensure that valuable insights and success stories are shared.

By highlighting successful use cases and providing guidance, the EEA’s report aims to bridge the gap in understanding and facilitate the adoption of Ethereum and its associated technologies in enterprise settings. It serves as a valuable resource for companies looking to explore Ethereum’s potential and implement solutions within their own business environments.

Key Challenges to Consider in Enterprise Ethereum Implementation

While enterprise Ethereum is maturing, there are several challenges that could impact its adoption, according to industry experts.

Lucas Henning, CTO of Web3 company Suku and a former Deloitte Blockchain Architect, highlighted high transaction costs, scalability issues, and security concerns as the biggest challenges for enterprises using Ethereum. The congestion on the Ethereum network and the complexity of transactions have resulted in high transaction fees, which has prompted users to explore alternatives. However, the shift to layer-2 (L2) solutions, while addressing some cost issues, introduces its own set of challenges. L2 solutions increase resource demands and still require L1 resources for settlement, such as rollups.

Alexander Mamasidikov, Founder and CEO of crypto payment solution provider CrossFi, echoed these sentiments, stating that L2 protocols may solve speed and gas fee issues but complicate the usability of the blockchain itself for enterprises.

Henning also noted that despite improvements like the Dencun upgrade aimed at enhancing rollup efficiency, scalability on Ethereum remains constrained.

Despite these challenges, there is optimism about the future growth of enterprise Ethereum. Joseph Brody, Executive Director of the Enterprise Ethereum Alliance (EEA), pointed out that enterprise buyers show enthusiasm for the technology when the market price of Ether increases, even though their work is often unrelated to the price of crypto assets. Additionally, Brody emphasized that as regulations become clearer, enterprise Ethereum adoption will continue to thrive. He cited the Markets in Crypto-Assets Regulation (MiCA) in Europe as a significant driver, as it creates a favorable regulatory framework and has renewed enthusiasm in the finance sector for this technology.

While challenges such as high transaction costs, scalability, and security need to be addressed, the optimism surrounding enterprise Ethereum is fueled by market dynamics, growing enthusiasm, and the development of regulatory frameworks that provide clarity and confidence to enterprises considering Ethereum adoption.

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