If you’re bullish on ETH then this is a time to be more bullish as ETH will be smashing new ATHs in 2020 and the rest of the decade.
Ethereum has made more impact on the cryptocurrency space (in terms of contribution to the overall development of the market) than any other single project has ever done –not even Bitcoin.
If this is your first time to hear about Ethereum, then you’re advised to watch the video below and learn about the second largest blockchain in the world from the mouth of the founder Vitalik Butterin; after which you can join us in the rest of the article. Also, if you are entirely new to the idea of cryptocurrency and bitcoin it will be more profitable to first read our previous post >> The Origin, History and Evolution of Money -The Transition to Cryptocurrency (BITCOIN) first -just for you to fully understanding what we are talking about here.
Good, welcome back here. So let’s take a look at the top three (3) bullish facts that’s looking to push the ETH price over your roof and straight to the moon in the next few years ahead.
1. Largest Ecosystem
Out of the over 1,500 crypto tokens available on the Coinmarketcap, more than 80% of them run on the Ethereum Network. This translates to nearly half of all cryptocurrencies being powered by the Ethereum blockchain –we can safely conclude or strongly argue the fact that Ethereum right now is simply too big fail.
Also worthy of note, is the fact that most of these cryptos running on Ethereum have millions of users such as BAT, DNT, DAI, NEXO just to mention a few with hundreds of millions in dollars daily transactions and have a combined market capitalization of about two hundred billion dollars ($200,000,000,000). This is incredibly massive and absolutely unmatched by any other blockchain currently existing –not even Bitcoin.
Demand and use case drives value and value drives price. Given the increasing number of application of the Ethereum blockchain, all things being equal we can only see an ever increasing demand for the Ether which powers all of this projects and applications running on the Ethereum blockchain.
2. Ethereum (ETH) 2.0 Network Upgrade
Today, Ethereum processes roughly 500,000 transactions per day, and at full capacity, can process about 13 transactions per second.
Salability has been the biggest Achilles heels of the Ethereum Blockchain for the past few years. Transactions on the Ethereum blockchain are slower due to over capacity –leading to very poor user experience and limiting the growth potential of the decentralized applications (dApps) that are built on top of it.
Ethereum’s scalability problem stems from the fact that each node in the network has to process every single transaction as a check against potential malicious miner activities; resulting in inefficient and wasteful utilization of network resources as every node has to confirm and verify every transaction on the network.
The solution is Ethereum Ethereum 2.0 –the most ambitious undertakings in the blockchain space yet, which if it works as expected, will be one of the biggest breakthroughs for decentralization. At the core of Ethereum 2.0 are three scalability solutions designed to make Ethereum more widely used:
1. State Channels
This makes it possible for users to perform peer-to-peer transactions outside of the blockchain and only sending messages onto the main chain when they want to exit the channel, much like the bitcoin lightning network.
Based on this solution multiple transactions can be executed off the blockchain just like adding products to a shopping cart and when they’re done making all the transactions those transactions (like products in a cart) are sent to the main chain as a single transaction using a single transaction fee. This will lead to cheaper and faster transactions as they’re all bundled together.
Now I know this seem like a heck of a job but the process is handled by the smart contract that powers the blockchain.
Plasma is a framework for the creation of child blockchains which are connected to the main Ethereum blockchain through a root smart contract. The root contract specifies the rules by which all transactions on the child chains must operate. Transactions on the child chains are then synced to the main Ethereum blockchain.
All these seem highly complex and confusing at first glance, but the concept is quite very simple. You can create as many child chains of to handle different transactions as long as the Ethereum network can verify that everything on those child chains is valid.
The last of the Ethereum 2.0 scaling solutions is Sharding. Probably the most ambitious and complicated solution of the three, sharding is an on-chain performance improvement for the Ethereum blockchain.
Sharding refers to splitting the entire Ethereum network into multiple portions called ‘shards.’ Each shard is essentially a separate blockchain with its own state.
Each of the shards and the smart contracts on them will communicate with every other shard and smart contracts in the network. A kind of cross-chain relationship and communication mechanism will make this possible.
Upon successful completion and launch, the Ethereum blockchain will have almost infinity scaling possibility and we should see price explode over the roof as adoption will be massive. Developers will be able to build applications that power millions of users; transaction speed will explode and fees will be nearly eliminated.
With 2 Ethereum 2.0 testnets (sapphire testnet and lighthouse testnet) already running we should start seeing tangible benefits in the next few months, primarily in transaction fees, finality, and user experience. From there, we will start experimenting on side-chains connected to a more robust and trusted Ethereum Network. Once it is cheap and easy to move frictionless between side-chains and the Ethereum blockchain, we should start to see some breakout usage and potential ATHs –good luck to us.
3. The Rise of DeFi and dApp Explosion
The Ethereum is the first and most popular Platform that created a protocol that enables developers to build decentralized applications (dApps). DApps are flexible, transparent, distributed, resilient and better incentivized software applications. There are dApps in virtually every sector such as dApps for governance, community, legal, health, education and financial (DeFi). They permit a more direct and trustless interaction between two parties.
The entire DeFi market is being powered by the Ethereum blockchain with already more than nine hundred million dollars ($900m) locked up as per the datat from DeFi Pulse; up from just $500m a few months ago. Compared to the measly $8.5million on the Bitcoin Lightning Network, Ethereum doesn’t seem to actually have a more worthy rival yet–at least in theory.
More so, the Ethereum network alone has exactly 2,670 dApps according to data from StateOfTheDapps; this figure will strike you more when you discover that there are just less than 3,000 dApps across all smart contract networks. That leaves Ethereum controlling more than 80% of the dApps market.
It’s amazing how much there is than naturally meets the eyes of the average investor about Ethereum relevance and development progress over the past years and the plans outlined for the future. The only cryptocurrency that’s position to challenge the number position in terms of market capitalization with Bitcoin is Ethereum and I strongly belief that, that will happen if not before the end of 2022 but certainly before the end of this decade.
Now it’s your turn. What do you think of Ethereum now and in the next few years? Please share your opinion in the comments section below.