Cats: You either love those harry furballs or you don’t, but the internet is filled with them. Given their ubiquity in the digital space, it was perhaps inevitable that cats cross over into crypto-land and onto the most dominant smart-contract platform today: Ethereum.

This week, it was reported that cryptocurrency users were spending millions on Ethereum CryptoKitties — more on that in a bit. Ethereum, unlike Litecoin or other coins making a comeback from four to five years ago, is not a copy of Bitcoin. Ethereum is a brand new Blockchain with many improvements, including and especially the addition of virtual machines that can execute smart contracts.

To understand how and why the CryptoKitty craze caught on, it’s important to first understand what differentiates Ethereum from Bitcoin and other cryptocurrencies — and why it’s the most suited for growth.

What Are Smart Contracts?

Smart contracts are essentially small programs that run based on the logic: “if this, then execute that.” When you combine multiple smart contracts together, you can create full-fledged applications that go well beyond basic transactions.

Ethereum turned itself into a blockchain technology rather than blockchain currency. It started a revolution that will change banking, coding, hosting, application development and security forever due to Dapps (decentralized applications).

What It Means to Be “Decentralized”

To be “decentralized” means applications don’t go down if a server farm goes out as the result of a bad upgrade or an employee error. The application runs within every miner’s machine or machines that are providing proof of work. We’re talking about thousands upon thousands of mining machines that are keeping the network running.

“Decentralized” apps also mean lower costs, higher uptime and irrevocable data. No single person can ever take down the whole system or change it without others verifying and agreeing to the changes.

So What Do Cats Have to Do With This?

Recently a web-based app called CryptoKitties was released and ran on top of the Ethereum network. Meant as an app that allows users to create and trade digital kitties with each other, it instead turned into an Ethereum slayer. The hit app has gone viral, collecting as much as $7 million dollars in trades. A single record-breaking cat was sold for $100,000!

Because each cat and transaction is hosted within the Ethereum network, it has clogged up the network and has caused major slow-downs. It was reported that as many as 30,000 transactions are still waiting to be processed at the time of this writing.

The Achilles heel to Ethereum is scaling, just like Bitcoin. But while Bitcoin can handle between five to seven transactions per second, Ethereum can only process 15 transactions per second. Vitalik Buterin, Ethereum’s co-founder, and his team are well aware of this issue and are committing to fixing scaling once and for all in 2018.

Competition Is Coming

While Buterin is working on improving Ethereum with upgrades and scaling, others aren’t sitting around waiting for it to happen. Another Ethereum co-founder Charles Hoskinson has started Cardano, and its new state-of-the-art blockchain is rapidly being developed. Cardano promises to fix scaling with its side-chain solution. EOS, another platform set to come in 2018, is also doing the same.

To put it plainly, if Bitcoin was a bike, and Ethereum was a Camry, Cardano would be a BMW.

That being said, there is a reason why there are millions of Camrys on the road today. They are neither the fanciest nor fastest vehicles, but they are reliable and dependable and have established themselves as such.

There are now over 1300 cryptocurrencies in existence, and a few hundred more are coming out every month. But a vast majority of them are all ERC-20 based and riding on top of Ethereum’s network. Caradno and EOS are unproven at this point. And until adoption is readily seen, Ethereum is still king.

Why Ethereum Could Reach $4,000 by 2018

Buterin and team are hard at work fixing and improving Ethereum, and I feel confident they will see breakthroughs in 2018. Although Ethereum might not have all the bells and whistles that the newer cryptocurrency platforms might have, it does have the advantage of being first to the market with smart contracts and has more than 1000 decentralized apps riding on top of it.

With ICOs (Initial Coin Offerings) more regulated and slowing down due to oversaturation, Ethereum’s value could grow 1,000 percent and see a potential value of $4,000 by the end of 2018 — as long as it’s scaling issues are a thing of the past.

As Bitcoin’s price rises and more institutional money is flowing into the cryptocurrency market, Ethereum is the most suited for growth because of its dominant position as the platform that almost all decentralized apps run on and are being built for.

George Tung is the founder of CryptosRus.com , which covers Bitcoin and cryptocurrency analysis, guides, reviews and more.