The Ethereum community is getting significant attention with the recently announced reverse takeover of Movit Media Corp. by Ether Capital Corporation.
Ether Capital is an initiative that has a considerable number of heavyweights behind it, including OMERS and Purpose Investments, a fund management firm led by Som Seif. Seif is serving as chairman as well as co-chief investment officer of Ethereum Capital, along with Benjamin Roberts, co-founder and CEO of Citizen Hex.
According to the press release, Ether Capital is the first publicly listed company focused solely on the Ethereum ecosystem. It reports that its initial focus will be on Ethereum’s native utility token Ether – the system’s unit of payment and digital token creator – as a strategic asset. The total investment in Ether will account for 80 to 90 per cent of its available capital.
The intent of Ether Capital is to build a technology company that will serve as the central hub of business on the Ethereum network. Spokespeople stress that its interest is not in currency speculation, but building relationships with entrepreneurial Ethereum-based businesses that will help to grow the platform.
During the initial stages, the focus will be on building a bridge between the financial industry and the Ethereum ecosystem, explains Michael Conn, CEO.
“We are looking to grow and partner with different businesses in order to build a deep vertical within the financial area and then go wider from there,” he says.
The timing is fortuitous given that over 90 per cent of apps today are being built on the Ethereum platform, he adds. “Right now Ethereum is where most businesses are. Today there are 900 different decentralized apps that are interoperable on Ethereum.”
That interoperability will help to solidify Ethereum’s potential to become a platform of choice, as businesses can leverage each other to grow. “The stronger the ties to interoperability, the more difficult it will be to go to another backbone,” Conn claims. “Other blockchains being developed don’t have as strong a community.”
By providing a public vehicle that gives people access to crypto assets versus buying them on a cryptocurrency exchange, it will encourage institutions and others to participate in what is happening, explains Roberts. “Over a short period of time, crypto assets have gone from something seen as a joke that was completely suspect, to being on the verge of going mainstream. We can provide the next incremental step in pushing them there.”
Roberts firmly believes in the potential of Ethereum to transform the world the way the internet has. “But we need to get all stakeholders on board for it to happen. This is not just for the geeks. We are creating a public vehicle that will move the needle in letting people get exposure and learn about Ethereum and the opportunities. It’s about moving things forward as people get more comfortable with crypto assets.”
While Bitcoin continues to hold the lion’s share of market cap, Ethereum has been gaining ground, Roberts says. “Ethereum is taking a big chunk of the Bitcoin market cap. It was 1/100th. Now it’s roughly half. Conceptually Ethereum is more interesting and gets more things right – and people want to build more interesting stuff.”
There are plenty of opportunities for Ethereum beyond the financial services sector, Roberts notes. Perhaps the most well-known examples of what can be done is smart contracts. “Ethereum has democratized financial engineering. With it, you can write a smart contract and create what assets you want.”
When asked about the ecosystem players, Roberts says the opportunities are widespread. “It’s very much like the timeline of the internet. Everything is more accelerated now. Over time the people will want to come on board and take advantage. First adoption is the risk takers and speculators. Then we will see regular businesses wanting to engineer financial incentives to get people engaged. After that we see larger financial institutions embracing it. It is going to be driven from the bottom up, versus the top down.”
The beauty of Ether is that anyone can use token incentives, which means endless possibilities for various sectors, he believes. Beyond financial institutions, Roberts sees gaming and insurance as particularly strong markets. Other potential activities include trading electricity and other commodities, supply chain tracking and property titles.
He likens the trajectory to the early days of social media. “It started with consumers, then all of a sudden every business got into it. We’re a few years away from that at the moment.”
Conn believes the only inhibitor at the moment is the lower speed of transaction processing on a decentralized platform. “But developers are trying to figure out ways to expedite transaction speeds to where they need to be in order to match a centralized model. We’ll get there. It’s early days.”
As for Ether Capital in the here and now Conn says, “We’re really focused on growing the business and seeing where that goes.”