- Ethereum outshines Bitcoin in recent market performance
- The Ethereum Dapp network is built for sustainable growth
- Dapps are already being used to solve real-world problems
- Ethereum has launched its Beacon Chain, plans an upgrade to Shard Chains
- 2021 price prediction puts ETH around $2,000
For a long time, Ethereum has been under the show of Bitcoin, however, things might be taking a different turn. In the last one year, the Ether has seen gains of nearly 800 percent, surpassing that of the number one cryptocurrency.
Many will be quick to link the most recent price rally to the increasing institutional investors in Bitcoin, once again shelving Ethereum to the backline. Was Ethereum designed to forever be in the shadows of Bitcoin? Or will the coin eventually get its break? Here is the case for Ethereum in the coming months.
The Case for Ethereum
While both Bitcoin and Ethereum are built using Blockchain technology, they differ in their very root. While Bitcoin is just a currency, Ethereum is a ledger technology that companies use to build new programs.
These programs are referred to as decentralized applications. The Ether or ETH is just Ethereum’s coin value. Its ecosystem makes it far more robust than the pioneer crypto.
Another important part of this ecosystem is The Enterprise Ethereum Alliance. It is a group of Fortune 500 companies in an alliance to work together to learn and build upon Ethereum’s blockchain technology.
Ethereum is Built for Sustainable Growth
Ethereum proffers the most real-world use among all the digital assets. While Bitcoin may be enjoying the lion’s share of institutional investors, the Ethereum ecosystem is built to help both small and large companies reach their goals.
While Ethereum may be the second-largest cryptocurrency at the moment, its strength for sustainability comes from its ecosystem no the ETH. Already, the Ethereum blockchain is the underlying technical infrastructure for projects like:
- uPort, an Ethereum Dapp that aims to provide a decentralized identity for everybody.
- Augur, a decentralized prediction market that allows people to create prediction markets.
- EtherTweet is an Ethereum Dapp that acts as an uncensored messaging platform run.
- Everex, a platform that supports a P2P payment system pegged to fiat.
- VeChain Thor, which is perhaps the highlight of all ethereum based projects. It allows the authenticity and quality of any product to be tracked all the way through the supply chain.
Ethereum has successfully launched over 3,500 decentralized applications. Several of these Dapps are already being used by different industries for more than just payments.
In the future, these projects are bound to grow even as more find new use cases and come into the Dapp space. As they grow, the ETH will grow alongside.
Problem Solving With Ethereum
Very recently, a hospital in Cyprus used a VeChain Thor based applications to validate Coronavirus vaccinations. The app was used to certify 100 doctors and nurses in the Mediterranean Hospital, Cyprus.
Another Ethereum project, Ethlance, bills itself as the “world’s first job platform running entirely on Ethereum.” Freelancers on the platform pay zero fees for transactions.
On the issue of transactions, while Bitcoin takes about 15 minutes to complete a transaction, transactions of the same scale performed with Ethereum are completed under 15 seconds.
To solve the issue of limited supply and hoarding of ETH, the platform theoretically has an unlimited supply. This will help it maintain the growing number of Dapps on the platform and running out of coins to reward miners.
Ethereum Version 2.0
On the 1st of December, 2020, Ethereum launched its version 2.0 blockchain or, The Beacon Chain. The Beacon Chain introduced proof-of-stake to Ethereum.
For now, the Beacon chain exists separately from the Ethereum mainnet, although there are plans for future integration. The Beacon Chain is responsible for managing validators, dishing out rewards, and delivering the PoS consensus mechanism.
This new version also brings greater energy efficiency, lower barriers to smart contract entry, and an overall fairer playing field for miners and traders.
Since the launch of the Beacon Chain, the ETH has risen by more than 100 percent. In addition to the general upward trend of the crypto market, Ethereum has seen more growth, rising to its 3 years high in the process. Ethereum currently trades around $1,300.
On the Flipside
- The crypto market continues to move northbound, with Bitcoin at the forefront of the move.
- The number one cryptocurrency has once again surpassed its new all-time high to trade at $41,970 per coin.
- Crypto enthusiasts and analysts are backing the digital asset market for an overall bullish year as institutional investors mount interest in the growing industry.
Future of Ethereum
The Beacon Chain is the first of three planned updates to be made to the Ethereum MainNet. The future goal is to create a more secure and scalable Ethereum network. Hence the combination of proof-of-stake to its current proof-of-work approach.
The future of Ethereum lies in its Shard chains. Here the network’s load will be spread across 64 new chains. This will make it easier to run a node by keeping hardware requirements low. Shards will give Ethereum more capacity to store and access data.
The dynamics of Ethereum’s economics will completely change with Ethereum 2.0. In the current Ethereum MainNet, there is a 4 percent per annum inflation rate for the issuance of 1 ETH. However, With ETH 2.0, the inflation rate will supposedly drop down to 0.5%, with respect to validators’ participation.
Following the Beacon Chain launch, Ethereum has stated that work is underway to move to this network. The planned morph into Shard Chains is expected to start in 2021. More growth is underway for Ethereum.
Ethereum currently floors Bitcoin in the area of transactions and scalability which it plans on improving gradually over the next three years. As this happens, Ethereum will continue to enjoy more finance use cases, eventually eclipsing the current financial system in terms of usage.
Ethereum as the Digital Oil
While Bitcoin is referred to as the Digital Gold for being the first and biggest digital asset, Ethereum takes its place as the Digital oil.
The Ether is referred to as the ‘digital oil’ because, like crude, it delivers value to its holders based on their fee-generated revenue, just as real-estate dividends or equity dividends.
Also, unlike gold, the digital crude as a store of value will significantly more useful and more programmable. The Ether checks all those boxes. The planned three use-cases for the Ether.
- Consumable Asset: Already the ETH is required to pay for transactions or other forms of computation on the Ethereum network.
- Capital Asset: Its planned network upgrade will make the ETH a capital asset. What this means is that the ETH will soon be a requirement for block producers to have the right to propose and attest to blocks. As the network grows, the ETH will become an indispensable part of the Dapp ecosystem.
- The ETH is used as collateral for protocols and applications built on top of Ethereum. The Ether acts as collateral for every Dapp or project launched on the network.
Upon completion of the Ethereum 2.0 network, the Ether will become the first triple-point asset. Because of the Ether’s numerous use cases, it is bound to grow into a state-free, global money market capable of surpassing that of gold.
One area where the asset has been criticized for its lack of an underlying hard asset; or its value has no basis in the real world.
However, the problem is being solved by the influx of projects into the Dapps ecosystem. Furthermore, the new platform Ethereum is migrating to would solidify Ethereum as a usable asset.
2021 Price Prediction for Ethereum
When placed side by side with any digital asset, Ethereum comes out almost unscathed for being a network capable of solving multiple problems. If Ethereum solves its problem of underlying assets – through strategic partnerships as well as institutional investments, the ETH could solidly plant its flag on the moon.
As investors are beginning to understand the scope of the Ethereum network, more analysts are giving their predictions on the asset. For example, Blocktown Capital’s managing partner, James Todaro, has a high expectation for the Ether in 2021. His 2021 ethereum price prediction puts the Ether at a value of $9,000.
An analysis performed by DigitalCoinPrice put the price of 1 Ether at $1493 at the end of 2021. However, as at the time of this writing, an Ether is currently trading around $1,300. Less than $200 less. This shows just how much impact the December launch had on Ethereum.
As the new Ethereum platform develops, we are backing the Ether to rise up to $1,500 in the near term and between $2,500 – $4,000 by the end of 2021.
All this is attainable depending on how efficiently it manages its upgrade as well as the performance of the projects currently utilizing its technology.
The real value of Ethereum lies in the far future. In the long run, Ethereum could own the crypto space because it is the clear leader to become the most useful blockchain. The bigger its ecosystem grows, the more value the Ether is bound to accumulate.
By 2022, Ethereum will be launching its derivative product. The development of Ethereum 2.0 began back in 2017, making its launch very anticipated, and slightly overdue.
So, by next year there will likely be more institutional funds coming into the Ethereum marketplace, thus the price of ETH is very likely to see a massive rise.
Disclaimer: Investing in digital assets or related tokens is highly speculative, and this is by no means investment advice. This analysis of Ethereum is based on history, happening events, and speculation
In Conclusion
When placed side by side with any digital asset, Ethereum comes out almost unscathed for being a network capable of solving multiple problems. If Ethereum solves its problem of underlying assets – through strategic partnerships as well as institutional investments, the ETH could solidly plant its flag on the moon.
