Superior Ease of Exchange Could Allow Ethereum to Overtake Bitcoin

Superior Ease of Exchange Could Allow Ethereum to Overtake Bitcoin

Bitcoin's lofty valuation and manic price swings receive intense news coverage, but Ethereum may provide the foundation to build an alternative worldwide financial system.

Ethereum, the world's second most popular cryptocurrency, has generated innovative financial products that could lead to decentralized finance, called "DeFi" in crypto circles, allowing for peer-to-peer transactions without using a commercial bank.

"DeFi uses smart contracts to create protocols that replicate existing financial services in a more open, interoperable, and transparent way," Dr. Fabian Schär said in a research report published by the St. Louis Federal Reserve Bank.