Is Ethereum ready for jumping? For this reason, the altcoin could be underestimated
Is Ethereum ready for jumping? For this reason, the altcoin could be underestimated
- The ETH was hit hard by the market turbulence after the Russian invasion in Ukraine.
- At the beginning of this week, more than $ 500 million Ethereum was deducted from the cryptocurrency exchanges, since dealers hope to hold their cryptocurrency in expectation of an interest bully proportion.
On February 24, the price fell $ 12 percent to $ 2,348, the lowest level since last July. Since then, more than $ 500 million Ethereum have been deducted from the cryptocurrency exchanges, since retailers hope to capture their cryptocurrency in anticipation of a bullish price movement. According to chain analysis data would be seen as an indicator for a bullish market.
The assets held on stock exchanges increases if more market participants sell than buy and buyers prefer to keep their assets on the stock exchange,
At the beginning of February, a report by bankers at Morgan Stanley emphasized the risks that threaten the future of Ethereum, while at the same time offering opportunities for so-called "Ethereum-Killer":
- Ethereum is not decentralized: 100 addresses have 39 percent of the ether currency
- It's too volatile.
- The software is more endangered than Bitcoin because it changes more often, more complex and more prone to interference is
- Ethereum is serious about competitors such as Binance, Solana and Cardano
- High transaction fees create problems with scaling and endanger demand growth
- Since the project is strongly bound to decentralized financial activities, it is ultimately susceptible to potential regulatory restrictions.
So what is Ethereum is about in 2022 and beyond? Will the blockchain continue to dominate the industry? Will the price of cryptocurrency be able to return to its earlier heights?
switch from Ethereum to POS in 2022
The introduction of Ethereum 2.0 blockchain will continue in 2022. At the beginning of August 2021, the London Hardfork activated the flaring of coins in the Ethereum blockchain, which is expected to support the value of ether (Eth) by reducing the offer to tokens.
On October 27, 2021, the altair upgrade took place in the core network. The new Ethereum network called Beacon Chain tests the transition to POS, a transaction validation model for mining. The core network of Ethereum will merge with the Beacon Chain in 2022 and thus complete the transition to Ethereum 2.0.
The upgrade of the Arrow Glacier network took place on December 8, 2021-which delayed the "complexity bomb" (increased mining complexity) and the transition from Pow to POS moved to June 2022. Proof-of-Work (Pow) is the consensus salgorithm used there by the Bitcoin blockchain, which verify transactions and minor blocks through complex calculations. The POS algorithm verifies transactions using validators that place tokens in the network, which requires less computing power and power consumption.
"The miners or customers of the Ethereum network wanted to avoid a rollback while working on the next big update," said Ethereum Cat Herders.
The complexity regulation was originally supposed to make the transition to POS easier, but over time has assumed the additional property of encouraging those who want to continue to work with Ethereum to update their nodes. Therefore, staying in the old chain is not an option.
also read: Astonishing $ 6 billion in ETH have been burned so far, Ethereum 2.0 is moving closer
growing institutional interest in Ethereum
In 2021 Ethereum aroused the interest of institutional investors due to the development of decentralized financial services (DEFI) and the earning of non -interchangeable tokens (NFT).
According to Coinshares, Ethereum had capital outflows of $ 39.2 million in the first week of 2022.
The investment bank JP Morgan is one of the institutions that increasingly venture into the area of cryptocurrency. During the event of the Crypto Economy Forum, the JP Morgan Bank NFTS, which were created on the Ethereum-based polygon network, distributed, which were then published on the OpenSea NFT marketplace. Recently, the Bank of America also issued its first NFT token to support the International Sibos Conference.
The conclusion
The Smart Contracts markets will continue to grow strongly in 2022. Last year, the Sectors Defi (from USD 22 billion to USD 240 billion) and NFT (from USD 250 million to USD $ 2.1). It is expected that the market for meta universes will be booming this year and growing from 600 million to $ 5 billion. Despite the high network overload, the demand for ether will continue to grow, but a lot depends on the speed of the transition to POS.
The Base Rate Forecast Scenario assumes that the changeover to the new protocol will be delayed again. In this case, Ethereum will increase to $ 7,000 by the end of the year. If Vitalik Buterin succeeds in successfully bringing the two branches together, the cryptocurrency will probably reach the $ 10,000 mark.
Source: Crypto-news-flash.com
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