Following the launch of the first production-ready version of Ethereum this month, bitcoin businesses are moving to investigate how they might apply the blockchain platform as part of their existing products or services.

So far, startups as diverse as cloud money platform Uphold, bitcoin mining firm BTCS and hardware device provider Ledger are among those that have announced Ethereum initiatives. And in what may be one of the most high-profile signs of interest, bitcoin startup Coinbase plans to hold an internal event on the platform this week.

However, exactly how these companies will seek to use Ethereum, and whether they will do so in a way that is consistent with the vision of the next-generation blockchain platform remains unclear. Announced in 2014, Ethereum is distinguished by its support for smart contracts and ability to support decentralized applications or dapps.

Despite these wide uses, interviews suggest bitcoin startups are adding support for Ethereum through services that aim to boost the liquidity of its transaction token, ether, and that while they are excited about its larger potential, they’re not sure how to define this opportunity or what it may mean for their business.

Uphold EVP Jorge Pereira, for example, said that his firm is seeking to add support for ether as a first step, but that it will remain open to other applications as they emerge. Still, he spoke to overall change in perception that has brought about this shift.

Pereira told CoinDesk:

“Before, Ethereum was a curiosity. No one knew whether it would take off. Now it’s achieved a number of goals that make it something that has sizeable potential. The first thing we can easily do is provide support for holding and converting ether, however, with Ethereum we don’t see the goal being that.”

Elsewhere, members of the bitcoin community struck similar tones.

Ledger co-founder Thomas France noted his firm sees its support of Ethereum as a necessary step toward applying its technology to a wider variety of blockchains. Ledger recently announced support for Eris Industries, for example, which offers permissioned blockchain solutions.

“The core of our business is to provide ways to leverage secure hardware for developers and companies,” France told CoinDesk.

Other industry businesses have sought to offer services for those seeking to buy or sell ethers in a similar manner as digital currencies, even as the platform’s creators indicate ether is not meant to be a payment method or store of value.

Tapping new markets

Of interest for many of those interviewed was finding new lines of business. The statements suggest Ethereum may become a way for some firms to seek to grow their market size at a time when adoption of bitcoin as a digital currency appears to be stalling.

BitGo engineer Jameson Lopp, for example, said that the bitcoin wallet and security specialist is discussing whether it would be worth developing a wallet for the blockchain platform, though he cautioned such talks remain in early stages.

“Our business is helping people secure crypto. It mainly comes down to how much demand there is to secure ether from institutions,” he said.

Not all those who are interested have a long-term focus in mind, however. Charles Allen, CEO of bitcoin mining outfit BTCS, noted that his firm recently built custom Ethereum mining rigs as part of a pilot program due to the escalating price of ether.

In recent weeks, ether has been one of the more volatile currencies, rising to highs of around $13, up about $10 from six months ago. Allen indicated that BTCS is well-positioned to roll out hardware for Ethereum mining, given its background in creating specialized hardware for bitcoin mining.

“You can’t ignore [Ethereum] right now, at this price level, with a $1bn market cap,” Allen said in a recent interview.

He went on to indicate that the pilot seeks to examine whether mining Ethereum would be profitable given that it plans to transition from proof-of-work to proof-of-stake mining, meaning eventually, its transaction verification process would transition to the point where it would not require hardware.

Still, he said that since Ethereum runs on graphics processing units (GPUs), it’s possible for the company to resell the hardware it purchases.

“For us, this is opportunistic. You can’t mine Ethereum forever, [but] if we can jump in and make some money it makes a lot of sense,” he said.

‘Unfortunate’ attempts

In interview, representatives of the Ethereum project reported mixed feelings about the recent trend.

The platform’s inventor, Vitalik Buterin, noted he has been disappointed by how bitcoin industry firms are seeking to leverage the technology, noting that, to date, most initiatives have failed to “capture what the platform is about”.

He told CoinDesk:

“Some of that is fairly simple, there’s [we accept] bitcoin, we’re just going to accept ether, which is nice, but it’s kind of unfortunate. The whole thing is to do all the blockchain stuff other than currency.”

Buterin suggested that many industry firms haven’t digested the platform’s value propositions, which he acknowledged may be more abstract than bitcoin’s, and to an extent, a threat to some industry business models.

“A more traditional company might ask can we accept ether. But, that’s not the point. The point is that you will be replaced by a smart contract that is fully autonomous and doesn’t charge fees,” he remarked.

Still, there are problems in the Ethereum ecosystem that Buterin indicated he hopes innovators in the bitcoin space and beyond will solve.

For instance, he pointed to the centralization of Ethereum’s mining pools and the relative newness of its wallet applications as areas where it could benefit from the knowledge of other open-source technology communities.

Wait and see

Interviews suggest that these opportunities are resonating with industry businesses, even those that may have just taken initial steps to embrace ether.

For example, Andrew Lee, CEO of bitcoin deals platform Purse, noted that his startup is accepting ether, but that it has explored how Ethereum could be used to automate certain parts of the online commerce process and as part of conversations about the future of supply chains.

Lee suggested it remains to be seen whether applications like smart contracts become a use case for Ethereum, or if other efforts are successful at replicating this functionality on the bitcoin blockchain, an idea industry startup RSK Labs has raised $1m to undertake.

“I think what I foresee is there will be a limit to what bitcoin can do, and if we get there, Ethereum would be a good alternative,” Lee said.

Others noted that this exploration process is likely to take time, and that the ecosystem can be expected to continue to look for ways to apply Ethereum as the project matures.

Pereira added:

“With Ethereum, we’re still figuring it out as a community.”

Stolen idea image via Shutterstock