Ethereum Forecast: What Direction the Smart Contracts Hub Going?

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In cryptocurrency circles, Bitcoin is definitely the superpower. Any random survey on the street would indicate that the pioneer crypto has far greater name recognition.

Regardless, Ethereum is a made asset in its own right. Beginners researching what Ethereum is will be pleasantly surprised to discover that it is an entire sector within crypto. The growth of decentralized finance in 2020 was impressive, to say the least. These decentralized systems can democratize finance and make services more accessible for billions.

That is the essence of decentralized finance. Traditional finance had a centralization aspect that concentrated power in the hands of few. DeFi apps are granting developers unique tools to innovate and revolutionize finance.

Ethereum Has an Ascending Channel Pattern

You may think all cryptocurrencies are like Bitcoin. Not at all. Ethereum is much more than a store of value. The platform hosts thousands of decentralized applications that have real-world uses.

Ethereum rose in 2020 and this year on the strength of these applications. Institutional capital has followed the maturity of DeFi, pushing the industry past previous highs.

These use cases are likely to drive Ethereum in the future. The Ethereum blockchain has more versatility than the Bitcoin blockchain. Accordingly, developers have found a home to write code, create rules, and release applications. These applications run on “smart contracts,” which validate agreements without a supervising third party.

Decentralized platforms facilitate lending, trading, and even exchange services. The most significant decentralized exchange is Uniswap which moves billions in Ether and other assets every day. Blockchain provenance is creating an innovation boom that is disrupting finance all over.

Ether is at the center of this booming decentralized economy. The Wall Street Journal reported that 7 million new accounts that hold Ethereum balances were created in the first four months of 2021. This staggering number took existing accounts to over 55 million. Ethereum is now having a congestion problem because of the sheer number of transactions on the network. Luckily, Ethereum developers have enacted a series of upgrades to take the network to a new era of scalability called Serenity.

Additionally, the rise of non-fungible tokens (NFTs) provides more dynamism to Ethereum investors. NFTs create a unique ID or pieces of digital art with set rules for transferring ownership. Content creators and artists can write into a smart contract a piece of digital art and sell it as an NFT. This represents a new era in the marketing of digital art. Already, some NFTs are fetching millions of dollars at auctions.

The duality of DeFi applications and the NFT sector give Ethereum tremendous upside. Think of Ethereum as Google Playstore or Apple Store. It is a hub for many other financial services. Its use-cases will continue to expand as far as the imagination of smart contract developers goes.

Purchasing and Trading Ether Is Very Simple

It is fair to state that the price of Ether has only scratched the surface. The past twelve months were only a glimpse of what Ether is capable of.

Ethereum’s power is that it is at the center of a financial revolution. The true potential of decentralized finance and smart contracts will become apparent with time.

Purchasing Ethereum is quite simple. Follow these steps:

Find an exchange or brokerage platform like eToro to purchase Ethereum- These platforms make the sign-up process very simple.

Verify your account to ensure it is secure- This process typically entails providing basic identity details such as proof of address or passport.

Connect a payment channel such as a card or bank.

Deposit fiat into your account. Alternatively, if you have other cryptocurrencies, you can send them to your wallet address.

Make your first ETH purchase!

To Wrap It Up

Ethereum is one of the most important innovations of the past decade. Its position at the center of the next era of finance is taking shape.

Cryptocurrencies rely on supply and demand to determine prices. This is why Ethereum and other coins still exhibit significant volatility. That said, this volatility is an opportunity in itself.

In summary, Ethereum is a sleeping giant. The use cases for this platform and asset will only continue to grow as decentralized finance takes over.

Ethereum Closes in on Long-Sought Fix to Cut Energy Use Over 99 Percent

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Users and developers of the world’s most-used blockchain have been wrangling with its carbon-footprint problem for as long as it’s been around. Now, they say, several recent breakthroughs will finally enable them to drastically cut energy use in a year or less.

Ethereum (price in India) and better-known-rival Bitcoin (price in India) both operate using a proof-of-work system that requires a global network of computers running around the clock. Software developers at Ethereum have been working for years to transition the blockchain to what’s known as a proof-of-stake system — which uses a totally different approach to secure the network that also eliminates the carbon emissions issue.

The change — delayed time and again by complicated technical setbacks — couldn’t come soon enough for the cryptocurrency world, which weathered one of its biggest bouts of volatility ever this month after Elon Musk announced that Tesla would stop accepting Bitcoin as payment for cars because of the surging energy use. Bitcoin’s network currently uses more power per year than Pakistan or the United Arab Emirates, according to the Cambridge Bitcoin Electricity Consumption Index. The compilers of the index don’t measure Ethereum energy use.

“Switching to proof of stake has become more urgent for us because of how crypto and Ethereum have grown over the last year,” Vitalik Buterin, the inventor of Ethereum, said in an interview. He’s hoping the change is made by year end, while others say it will be in place by the first half of 2022. That’s about a year earlier than was expected in December.

“I’m definitely very happy that one of the biggest problems of blockchain will go away when proof of stake is complete,” said Buterin, who has been advocating for the shift since the blockchain was launched in 2015. “It’s amazing.”

The change could help boost the price of the cryptocurrency Ether, which is necessary to use Ethereum, as investors who are environmentally conscious take note of its vastly smaller carbon footprint. Much of the criticism of proof of work has come from millennials and investors who value positive environmental, social and governance, or ESG, standards.

“It’s hard to ignore that the ESG narrative is going to be big,” said Wilson Withiam, an analyst at Messari who specializes in blockchain protocols. “If you’re looking at Ether as an investment, it doesn’t have that looming over it.”

Pantera Capital, an early Bitcoin investment firm, agreed. “Ethereum has a massive ecosystem of decentralisd finance use cases with rapidly growing adoption,” Dan Morehead, founder of Pantera, wrote in a May 10 note to investors. “Combine these two dynamics and we think Ethereum will keep gaining market share relative to Bitcoin.”

The transition Ethereum developers are making is a huge undertaking. They have to create, test and implement an entirely new way of securing their network while maintaining the existing blockchain. Then when the time is right, they’ll merge the existing blockchain into the new architecture that uses proof of stake to verify transactions. The shift will also radically increase the speed of transactions that Ethereum can process, making it more competitive with established payment networks like Visa or Mastercard.

Proof of work uses the capital costs of buying and maintaining computer hardware as well as the electricity to run them as the economic investments that must be paid by the people who are securing the network, known as miners. In return, the first miner to verify the latest batch of Bitcoin or Ethereum transactions is rewarded with free Bitcoin or Ether.

That system has come under fierce criticism for years, most recently by Musk, who called recent consumption trends “insane.”

In proof of stake, the cryptocurrency Ether replaces hardware and electricity as the capital cost. A minimum of 32 Ether is required for a user to stake on the new network. The more Ether a user stakes the better chance they have of being chosen to secure the next batch of transactions, which will be rewarded with a free, albeit smaller, amount of Ether just as in proof of work.

So far, more than 4.6 million Ether have been staked in what’s called the beacon chain, worth about $11.5 billion (roughly Rs. 83,740 crores) at an Ether price of $2,503 (roughly Rs. 1.8 lakhs). That means once proof of stake is in place, the only electricity cost will come from the servers that host Ethereum nodes, similar to any company that uses cloud-based computing.

“Nobody talks about Netflix’s environmental footprint because they’re only running servers,” said Tim Beiko, who coordinates the developer work on the new network for the Ethereum Foundation, set up to fund and oversee development of the Ethereum protocol.

Danny Ryan, a researcher at the foundation, said Ethereum’s proof of work uses 45,000GwH per year. With proof of stake, “you can verify a blockchain with a consumer laptop,” he said. “My estimates is that you’d see 1/10,000th of the energy than the current Ethereum network.”

One of the first breakthroughs came when developers created a system where contracts on Ethereum can be executed off the main chain, what’s known as roll ups. That takes an enormous amount of pressure and demand off of the main underlying network, and also means fewer changes to the network need to be made.

The next leap was linked to roll ups. The move to a new Ethereum, known as ETH 2.0, has always envisioned the network being broken into 64 geographic regions in what’s called sharding. Transactions on one shard would then be reconciled with the main network that’s linked to all the other shards, making the overall network much faster. Yet it was complicated and a tricky security question and it was slowing down progress.

Once roll ups could be used for transactions, that meant the shards only needed to house data, Beiko said. In the prior model, the sharding system would’ve had to be up and running before Ethereum could move to proof of stake. That’s no longer the case, he said.

“Sharding goes from being very complicated to not too complicated,” Beiko said. “It’s not a blocker in the road map any more.”

Roll ups are limited by how much data that’s linked to the blockchain they can contain, Buterin said. This was a problem before developers realized shards could hold the data.

“If you can publish data on-chain, which you can do with shards, then the scaling goes up by a lot,” Buterin said.

The progress on proof of stake was shown recently by a test net where transactions on the existing Ethereum blockchain were successfully merged onto the proof of stake system, Beiko said.

“I’m more confident than I was a month ago,” he said. “There’s a bunch of non-trivial issues to figure out, but the fundamental architecture is set and pretty promising.”

With assistance from Olga Kharif.

Ethereum: 3 Things to Know Before You Invest

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Cryptocurrencies have had a tough time recently. After reaching its peak of around $4,200 per token in mid-May, the price of Ethereum (CRYPTO:ETH) has plummeted by more than 40% over the past week.

However, the current crypto crash doesn’t necessarily mean it’s a bad time to buy. If you’ve done your research and have decided you’re interested in investing in Ethereum, it can be a smart move to buy when the price is lower. This way, you can get more for your money and potentially see greater gains if the price bounces back.

Before you dive in, though, it’s important to make sure you know what you’re getting into. Cryptocurrency is unlike any other type of investment, so there are a few things you should know before you buy Ethereum.

How it differs from Bitcoin and other cryptocurrencies

First, it’s important to distinguish the difference between Ether and Ethereum. While the two names are often used interchangeably, technically Ether is the actual token, and Ethereum is the blockchain technology behind the cryptocurrency. It’s not possible to invest directly in Ethereum, but you can buy Ether like you would buy Bitcoin (CRYPTO:BTC) or any other type of cryptocurrency.

Ether isn’t as widely accepted as Bitcoin, which puts it at a disadvantage. However, Bitcoin is incredibly energy-intensive. In fact, both regulators and investors have expressed concern over Bitcoin’s environmental impact, and Tesla recently announced it would no longer accept Bitcoin as a form of payment because of environmental concerns.

Developers of Ethereum, however, are working on an update to the technology that will make it far more energy-efficient. Ethereum 2.0 will be released later this year, and it’s expected to use around 99.95% less energy than the current technology.

It is subject to extreme volatility

As we’ve seen over the past week, cryptocurrencies are no stranger to volatility. Before you invest in any cryptocurrency, think about how much risk you can tolerate.

Would you lose sleep if your investments suddenly plummeted by 50%? What about 80%? Throughout 2018, the price of Ether dropped by more than 90%, so it’s possible to experience drastic downturns with this investment.

Of course, the price of Ether did bounce back after 2018, but there’s no guarantee it will always recover. It can be tough to stomach this much volatility, so be sure you have a high tolerance for risk before you invest.

Consider its real-world utility

For any cryptocurrency to succeed over the long term, it needs to have utility in the real world. While some currencies may see their prices increase in the short term as more investors jump on the crypto bandwagon, if they don’t serve any real purpose, they won’t be around for long.

The good news is that Ether does have a few advantages over its competitors. The Ethereum blockchain is used for a variety of cryptocurrencies, and it’s also the foundation for decentralized finance and nonfungible tokens (NFTs). Blockchain itself has the potential to revolutionize the way data is stored, and Ethereum is a major player in that industry.

Because Ethereum has potential in several different ways, that gives it a leg up on its competitors. And since many of Ethereum’s applications may require the use of Ether, if Ethereum succeeds, Ether’s utility would increase as well. It’s still a risky investment, but the more utility a technology has, the more likely it is to become more widely accepted over time.

Ethereum’s price may be falling, but that doesn’t necessarily mean you shouldn’t invest. Just be sure you’ve done your homework and have a high tolerance for risk so that you’re as prepared as possible.

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