Building the Investment Case for Ethereum

Bitcoin is the main name in town when it comes to cryptocurrencies. However, Ethereum has had a fantastic year. Ethereum’s price has increased by 435 percent since the beginning of the year. It has risen by more than 1,700 percent in the last year. By contrast, the price of Bitcoin has risen by around 100% this year and 518 percent in the last 12 months.

These kinds of surges are difficult to dismiss, and some analysts say Ethereum has a bright future. Since the beginning of 2021, Ethereum has increased dramatically, and it shows no signs of slowing down. Experts agree that the ETH coin has a bright future ahead of it and that investing in Ethereum is a wise long-term financial decision. As a result, now could be a good time to invest in Ethereum ETH, as the coin is doing exceptionally well.

What is Ethereum?

To begin, it’s critical to understand the difference between Ethereum and Ether. Ether is a cryptocurrency that works similarly to Bitcoin. Ether is based on Ethereum, a blockchain platform.

Ether and Bitcoin have a lot in common. Both are digital currencies that can be used to make purchases. You can invest in Ether directly, just like Bitcoin, by buying coins. However, Ether is considerably less expensive than Bitcoin. As of this writing, Ether costs about $4,100 per coin, while Bitcoin costs about $57,400 per coin.

Bitcoin, you see, is a pure currency that uses a technology called blockchain to perform monetary transactions. Ethereum makes use of blockchain technology to allow the development of cloud-based applications that are secure and resistant to manipulation, among other things (some stuff getting too technical for me here). However, Ethereum uses a token called Ether, which is similar to Bitcoin, to conduct transactions. This is where Ethereum’s monetary value is stored.

Ethereum has drawn a wide range of interest due to its specific capabilities, including banking, real estate, investors, software developers, hardware manufacturers, and more. Basically, Ethereum will serve as an operating system such as Android for digital contracts and cryptocurrencies.

The History of Ethereum

“I felt [those in the Bitcoin community] weren’t addressing the issue in the right way,” Ethereum co-founder Vitalik Buterin said. I was under the impression that they were pursuing individual applications, and that they were attempting to directly help each [use case] in a Swiss Army knife-style protocol.” He had a different plan in mind.

When he got interested in Bitcoin as a 17-year-old programmer in 2011 and co-founded Bitcoin Magazine, Buterin was introduced to and fascinated by blockchain technology. He began to envision a framework that went beyond the financial use cases allowed by Bitcoin, and in 2013, he published a white paper outlining what would eventually become Ethereum in terms of a general scripting language.

The platform’s ability to exchange more than just cryptocurrencies set it apart from Bitcoin.

Buterin and the other Ethereum co-founders initiated a crowdsourcing initiative in 2014, selling participants Ether (Ethereum tokens) to raise more than $18 million to get their vision off the ground. In 2015, Ethereum’s first live update, dubbed Frontier, went live. Since then, the platform has expanded exponentially, with hundreds of developers now contributing.

Buterin hopes that, in the end, Ethereum will be the solution for all blockchain use cases that don’t have a specialized framework to switch to.

The Historic Price of Ethereum

Over the course of April 2021, the price of Ethereum (ETH) in US dollars continued to rise, hitting a high of over 2,500 US dollars at one point. In 2021, the price of ETH increased, similar to that of Bitcoin (BTC), but for different reasons: For example, Ethereum made headlines when a digital art piece was sold for over 38,000 ETH – or 69.3 million USD – as the world’s most expensive NFT. Unlike Bitcoin, which saw its price rise as a result of the IPO of Coinbase, the largest crypto exchange in the United States, Ethereum saw its price rise as a result of technical advances that piqued traders’ interest.

First, in April 2021, the so-called “Berlin update” was released on the Ethereum network, paving the way for lower ETH gas rates – or lower transaction fees. Second, the launch of Uniswap V3 – a smart contract protocol – in May 2021 is expected to boost Ethereum trading even further.

Ethereum Unique Addresses

The number of Ethereum Cumulative Unique Addresses is currently 154.67 million, up from 154.49 million yesterday and 98.78 million a year ago. This represents a change of 0.12% from yesterday and 56.59% from a year ago.

Ethereum Addresses Reached New All-Time High

The number of Ethereum addresses has exceeded previous records set in January 2018 and November 2020. The new peak in network activity comes the same week that Ethereum reaches a new all-time high.

This week has seen a lot of activity on the Ethereum network. Earlier in April, the world’s second largest cryptocurrency reached a new all-time high of $2,644. Active address on the Ethereum network has reached a new high in tandem with the new all-time high.

Ethereum addresses on the network reached a new all-time high of 771,000 addresses, according to cryptocurrency analytics and analysis firm Coinmetrics. This number exceeded the previous high of 735,000 active addresses set in January 2018. Also, in November 2020, a new high of 739,000 was set.

Specific market dynamics have contributed to each new peak. The rise of Initial Coin Offerings (ICOs) in late 2017 was likely a precursor to the ethereum network’s rapid growth, which peaked in early 2018 with active ethereum addresses.

The success of decentralized exchanges (DEX) like Uniswap began to take shape in November 2020, with a boom in decentralized finance (DeFi) applications. As a result, the number of active ethereum addresses on the blockchain reached a new all-time high. However, it appears that the number of active Ethereum addresses has increased once more.

Ethereum 2.0

Ethereum 2.0 is an update of the Ethereum blockchain that already exists. Its goal is to improve the Ethereum network’s speed, reliability, and scalability, allowing it to solve bottlenecks and increase transaction volume. Ethereum 2.0 is also known as Eth2 or Serenity.

In comparison to the previous edition, Ethereum 2.0 has some significant structural and design improvements. “Proof of stake” and “sharding” are the two main updates. Let’s take a closer look at each of these words to better understand how Ethereum 2.0 works.

What Is the Difference Between Ethereum and Ethereum 2.0?

The consensus system used by Ethereum 2.0 and its predecessor is the most significant difference. Proof of work (PoW) is used by Ethereum, while proof of stake (PoS) is used by Ethereum 2.0.

The proof of work mechanism is an energy-intensive procedure in which miners use computer hardware computing power to decode complex mathematical puzzles. This is also where new transactions are checked. Whoever solves the puzzle first adds a new transaction to the blockchain, which includes all previous transactional records.

Instead of miners, transaction validators use crypto to validate a transaction in the proof of stake mechanism. Validators must suggest a based on the amount of time and crypto they own. The block is added to the blockchain after a plurality of validators claim to have seen it, and they are credited for successfully completing the block proposition. This is the process of “forging” or “minting.”

PoS is a more energy efficient tool than PoW since it secures a blockchain with less processing resources.

How Will Ethereum 2.0 Be More Secure?

The scalability of Ethereum 2.0 is its most important feature. Since Ethereum 2.0 will use shard chains, it will be able to process up to 10,000 transactions per second, while Ethereum can only handle 30. This also causes a lot of delays and network congestion, which Ethereum 2.0 would avoid. Since transactions are done in parallel chains rather than consecutive ones, the implementation of shard chains speeds up the network and allows it to scale more easily.

The key motivation for developing an update to Ethereum is to increase the transaction’s overall security. The number of validators in many proof-of-stake networks is very limited. As a result, network security has deteriorated. Ethereum 2.0 needs a large number of validators (16,384), making it more decentralized, stable, and resistant to manipulation.

How does Ethereum work?

Ethereum, like all cryptocurrencies, is based on a blockchain network. A blockchain is a decentralized, distributed public ledger that verifies and records all transactions.

It’s distributed in the sense that everybody on the Ethereum network has an identical copy of this ledger, which allows them to see all previous transactions. It’s decentralized in the sense that the network isn’t run or owned by a single person, but rather by all of the distributed ledger owners.

Cryptography is used in blockchain transactions to keep the network stable and validate transactions. People use computers to “mine,” or solve complex mathematical equations that validate of transaction on the network and add new blocks to the system’s blockchain. Participants are given cryptocurrency tokens as a reward. These tokens are known as Ether in the Ethereum scheme (ETH).

Ether, like Bitcoin, can be used to buy and sell products and services. Its price has also risen rapidly in recent years, rendering it a de facto speculative investment. However, Ethereum is special in that users can create applications that “run” on the blockchain in the same way that software “works” on a device. Personal data can be stored and transferred, and complex financial transactions can be handled using these software.

According to Ken Fromm, director of education and development at the Enterprise Ethereum Alliance, “Ethereum is distinct from Bitcoin in that the network can perform computations as part of the mining process.” “With this fundamental computational capability, a store of value and medium of exchange can be transformed into a decentralized global computing engine and publicly verifiable data store.”

Ethereum Staking

Ethereum staking is allowed through smart contracts, which allow ethstakers to risk a deposit on their PoS validator node in exchange for rewards given out as a portion of the ether transaction processing costs on correctly verified blocks on the Ethereum blockchain.

The number of honestly staked ether determines the power of the Ethereum staking network. Ether is staked as a kind of bond to guarantee the authenticity of fresh blocks in exchange for a cut of the transaction fees on valid blocks. When a validator votes for a faulty block, Casper confiscates staked ether.

Ethereum will gradually transition to a completely PoS system, eliminating the need for computer farms to perform pointless computations, after initially through a hybrid stage that combines proof-of-work and proof-of-stake. Casper’s first iterative implementation still relies on PoW mining to generate new transaction blocks, so it won’t eliminate GPU shortages or inefficient power use overnight.

Ethereum staking allows ETH holders to profit from Ethereum’s shift away from a PoW algorithmic consensus network and toward a PoS algorithmic consensus network, both during and after the full transition to PoS. As soon as Casper is released on the mainnet, there will be money to be made. Early adopters have a good chance of succeeding. Individuals and businesses with enough ether, as well as members of the Ethstaking community, will profit from Ethereum staking. io is free to use. Staking pool for Ethereum that will make the most of the way Ethereum staking works.

Eth 2.0 Staking

In the first quarter, the total value locked in Ethereum 2.0 more than doubled, rising from 1.5 million ETH staked to 3.6 million by the end of the period.

During the quarter, the number of active validators protecting the network increased in tandem with the number of users depositing ether in 32 ETH increments. By February 27, the number of active validators had surpassed 100,000, and by April 12 it had surpassed 118,000.

In financial terms, total value locked in Eth 2.0 topped $8 billion in early April, just as the price of ETH achieved a market estimate of $2,000 per unit. The Eth 2.0 network is now the sixth largest proof-of-stake (PoS) network in terms of staked value.

Decentralized finance (DeFi) Staking

DeFi has firmly proven itself as a viable solution to a crushing economy. The current DeFi ecosystem provides obviously significant prospects for participants. Without a question, space has expedited the production of wealth among the masses. Staking is one of the most powerful contributing processes that proves DeFi has thoroughly transformed the financial system.

Currently, there are $64.26B staked in DeFi with a Maker Dominance of 15.19%.

The crypto market has been able to fulfill such needs of the modern, knowledgeable client since the introduction of Defi staking, and the market has experienced close competition for lending and borrowing from investors. Any dishonest blockchain member’s funds are entirely liable to be confiscated and distributed among the honest parties, which is an added benefit. 

Defi is the new face of finance, according to crypto industry experts, and Defi staking is the trigger for this extraordinary expansion of DeFi, culminating in mainstream adoption and broader inclusion.

Ethereum Gas Price History

Between October 2020 and March 2021, the Ethereum network fees paid to miners whenever a payment transaction is initiated on the blockchain more than tripled. Up until 2020, when the Ethereum network began to handle with greater volumes and more complicated transactions, these transaction costs – generally referred to as gas or Gwei – were thought to be quite low. This corresponded with the rise in popularity of Decentralized Finance, or DeFi, with more services putting more load on the cryptocurrency’s network. As a result, the price of Ethereum gas has risen for all users, particularly for NFT transactions in various segments.

Ethereum Key Use Cases

Ethereum has built a global network that underpins an interconnected marketplace of decentralized applications ranging from Decentralized Autonomous Organizations (DAO) to Initial Coin Offerings (ICO), Stablecoins, Decentralized Finance (DeFi), and Non-Fungible Tokens (NFT). While Bitcoin was the first cryptocurrency to use blockchain technology, Ethereum has expanded on Bitcoin’s decentralized digital currency by developing a global network that underpins an interconnected marketplace of decentralized applications ranging from DAOs to ICOs, Stablecoins, DeFi, and NFTs. Ethereum’s applications are numerous and growing rapidly, providing blockchain ventures with increased performance, protection, and decentralized equity in industries all over the world.

Banking & Financial Services Contracts

Smart contracts may be used in the banking sector to speed up transactions and automate a variety of financial procedures. It will aid in the accurate transfer of information as well as the fulfillment of both parties’ obligations. Since all terms are clearly visible to everyone, there is no space for error in a financial transaction, and the transaction remains transparent.

Most major banking networks have already adopted the Ethereum Blockchain projects to simplify cross-border payments, increase transparency, and organize online database management.

In the banking and finance industry, Ethereum smart contracts have a number of applications. Smart contracts can be used to automate processes and make transactions faster and more transparent in a variety of areas, including mortgages, payments, national bonds, and insurance claims. When a bond is about to mature, for example, if it is written as a smart contract, the money will be automatically transferred to the bearer’s account without the intervention of a third party. This makes the procedure more straightforward and effective.

Decentralized Autonomous Organizations (DAO)

Decentralized autonomous organizations, or DAOs, are blockchain-based organizations that operate without central authority, according to Ethereum developers. They are regulated by software-coded laws, and administrative decisions are decided by a group of stakeholders. DAOs is one of the first Ethereum inventions, and they continue to be popular today. While the 2016 hack of the first Ethereum-based DAO was a landmark moment in blockchain history, DAOs are still open-source and community-run. Several DAOs today, such as MolochDAO and MetaCartel, function in a similar way to the original DAO, pooling user funds to provide grants to Ethereum entrepreneurs.

Token Launches

Initial coin offerings, or ICOs, are token sales that work in a similar way to conventional Initial Public Offerings (IPO). Throughout 2017 and 2018, Ethereum-enabled startup fundraising played a significant role in the growth of blockchain and cryptocurrency. Though Ethereum’s use of crowdfunding to finance the implementation of its protocol in 2014 was novel, token releases exploded during the so-called ICO boom. This boost in support for crypto startups signaled a change in how creative businesses collect funds.

ICOs brought Ethereum and the wider cryptocurrency space a lot of coverage, but not all of it was optimistic. In the midst of the frenzy, some ICOs were poorly designed, a handful were outright scams, and others failed to meet their objectives — less than half of ICOs survived four months after their initial token sale. Many projects that raised funds through an ICO, such as Augur, a prediction market, and Brave, a privacy-focused web browser, are thriving.

Ethereum is the process by which major blockchain ventures launch and raise capital, demonstrating the potential to help the blockchain industry as a whole. EOS, for example, began its token sale on Ethereum before moving the tokens to its own blockchain. These token launches were instrumental in establishing blockchain as a global phenomenon.

Enterprise Ethereum

Enterprise Ethereum refers to Ethereum-based customized applications and networks designed for private companies and businesses. Enterprise clients maintain control over the architecture, validators, and users on these networks because they are permissioned. Samsung Group, J.P. Morgan, Mastercard, and Microsoft are among the more than 200 members of the Enterprise Ethereum Alliance (EEA), which are all experimenting with private versions of Ethereum for enterprise purposes.

A version of Enterprise Ethereum is used by J.P. Morgan and more than 300 banks to run an inter-bank payment network. Enterprise Ethereum is used by the Covantis initiative, which was founded by a group of commodity industry institutions to run a post-trade execution platform for agricultural shipping transactions. In addition, Microsoft and Mot Hennessy Louis Vuitton (LVMH) used Enterprise Ethereum to build a luxury goods tracking tool.

Decentralized finance (DeFi)

Decentralized finance (DeFi) is the newest Ethereum innovation to see a surge in adoption and development. Traditional financial products and services are being reinvented by DeFi platforms, which incorporate programmable, decentralized, and censorship-resistant features to create entirely new financial products. DeFi networks, for example, include peer-to-peer lending and borrowing, interest on crypto holdings, decentralized trading systems, stablecoins, and composable features that optimize passive earnings. Compound, MakerDAO, and Aave are some of the most common DeFi platforms. By 2020, the overall amount of DeFi platforms would have surpassed $4 billion.

Investor Friendly

Over the course of 2021, Ethereum’s price has been primarily bullish, with new highs being set on a regular basis. Ethereum’s popularity continues to rise. Rothschild Investments most recently paid $4.75 million for 265,302 shares in Grayscale’s Ethereum Trust.

This indicates that investment companies are considering diversifying their holdings outside bitcoin to include other big cryptocurrencies such as ethereum.

Although the ethereum network is currently beset by high gas fees, the network is set to receive several major updates this year in order to reduce transaction costs. The London fork is scheduled to go live in July, following the activation of the Berlin fork. This is most definitely a good predictor of more bullish market behavior in 2021 for ethereum.

Prediction Markets

The prediction market has existed for decades, but due to the risks involved, it cannot become mainstream. However, knowledgeable players can earn a significant amount of money using the Ethereum blockchain. When forecasters and researchers collect data to estimate the probabilities of future events, there is a higher likelihood of prediction.

Players have been betting on various games for decades, with stakes ranging from cents to millions of dollars, with little confidence in a third party. Classic gambling games are the first medium to be revolutionized by the smart contract principle in this scenario.

Only a few prediction platforms, such as gnosis and Augar, have adopted the Ethereum blockchain. The prediction market might be a good place to start if you want to use Ethereum Blockchain smart contracts. This could be a bet on the result of a football match, an election campaign, or auctions, among other things. Participants are encouraged to make predictions, and those who do so correctly are compensated using trustless smart contracts on the Ethereum blockchain.

Thus, the Ethereum blockchain principle can be applied to any form of betting, gambling, or even determining whether or not a business can make a contract or launch a product by making the whole process more satisfying and less expensive.

Replacing Escrow

Smart contracts are a concept that can be used to eliminate middlemen and help you save money. Not only does this service save you money, but it also makes the process much more straightforward. However, before giving it a final go, this definition must be fully implemented and checked in all relevant departments. Smart contracts based on Ethereum can be used in real estate, wills, and other situations where there are nominees. Upwork is another example of a network where a smart contract can be used as an escrow. Furthermore, it would not charge a fee for each and every piece of work. This makes the procedure more cost-effective and comfortable.

Digital Identity Management

The Ethereum blockchain addresses one of humanity’s most pressing issues: identity theft and data monopoly. Companies like Amazon and Flipkart have access to your credit and debit card details, which they can sell to anyone at monopoly rates. It’s just an example; they don’t really do it. However, the issue is true, and identity theft is occurring at an alarming rate. As a result, to protect this issue, the data may be stored in an uPort app that only you can access. Your data is secure in uPort with this technology, and it cannot be accessed by any organization.

Famous Ethereum Investors

Ethereum, the world’s second most valued cryptocurrency, is currently attracting greater investor interest. Even more Ethereum investors have entered the market since December 2017, when the price of ETH, like most other cryptos, reached an all-time high. We’ll go over the 5 most well-known ones today.

Vitalik Buterin

Vitalik Buterin, the Ethereum Co-Founder, has become a crypto millionaire. With the current spike in the world’s second-largest cryptocurrency, Buterin’s ETH holdings have surpassed $1 billion in value.

Buterin’s public Ethereum address currently possesses 333,520 ETH with a total worth of $1.05 billion, according to Etherescan. Following a more than 300 percent increase in the price of Ethereum this year, Buterin’s overall net worth increased dramatically.

Joseph Lubin

Joseph Lubin is one of the most well-known figures affiliated with the Ethereum project, with extensive experience in domains like as software engineering, robotics, machine vision, and neural networks. Joseph Lubin was reportedly one of the top bidders in the Ethereum crowd sale a few years ago, according to numerous rumors. Various industry insiders consider Joseph Lubin to be one of the most important Ethereum holders, with a valuation estimated to be as high as $10 billion.

Richard Sherman

Another well-known cryptocurrency enthusiast is Richard Sherman, an American football cornerback for the San Francisco 49ers of the NFL (National Football League). Richard has stated on many occasions that he has a tiny amount of BTC, ETH, and LTC but is uninterested in the plethora of other smaller cryptocurrencies. He bought Bitcoin when it was worth approximately $1,000 and was able to pay out when the value jumped to over $19,000. Regardless, he expressed regret for not maintaining the Bitcoins in their original state.

Grayscale

Grayscale Ethereum Trust is entirely and passively invested in Ethereum, allowing investors to obtain exposure to ETH through a security while avoiding the difficulties of purchasing, storing, and safeguarding ETH directly.

Currently, they have 3.16M ETH holdings which is equivalent to $8.84B.

Cameron and Tyler Winklevoss

Cameron and Tyler Winklevoss have been in the news several times because of their ties to the crypto realm. Despite their investment in Bitcoin (BTC) and focus on this digital asset, the Winklevoss brothers also held Ethereum. Initial Coin Offerings (ICOs) are tokens on top of tokens, according to Tyler Winklevoss. They are not compatible with securities law. Mr. Winkleovss stated that the Ethereum network and its tokens have value because of the network itself rather than other digital tokens.

There is currently no clear information on how much ETH they own or whether they have decided to sell a portion of their ownership. Regardless of the virtual currency they hold, they will continue to play an essential part in the entire cryptocurrency market.

Ethereum vs. Bitcoin

After Bitcoin, Ether (ETH), the Ethereum network’s cryptocurrency, is arguably the second most common digital token (BTC) and also second when measured by its current Market Capitalization (as of May 2021). Comparisons between Ether and BTC are only normal, given that Ether is the second-largest cryptocurrency by market capitalization.

In several ways, ether and bitcoin are similar: both are digital currencies that are exchanged on online exchanges and held in different forms of cryptocurrency wallets. Both of these tokens are decentralized, which means they aren’t distributed or supervised by a central bank or other governing body. Both make use of blockchain, a distributed ledger system. However, there are a number of key differences between the two most common cryptocurrencies in terms of market capitalization. We’ll look at the similarities and discrepancies between bitcoin and ether in more detail below.

Similarities Between Bitcoin and Ethereum

Bitcoin and Ethereum are both decentralized, meaning they are not issued by a government or other central authority. They’re both based on blockchain, a distributed ledger that’s ideally tamper-proof (tech experts with outrageously expensive gear can work around platform protections).

If you work with a reputable crypto trading site, you’ll almost certainly be able to exchange both Bitcoin and Ether. Since both currencies are so common, they are often singled out for use in fiat-crypto exchanges, excluding smaller coins.

Differences Between Bitcoin and Ethereum

Bitcoin was designed to do one thing well: allow people to anonymously move money from one individual to another without the involvement of a central bank. Ethereum was based more on the blockchain concept than it was on Bitcoin as a currency. As a result, instead of serving as a portal to provide us with a store of value token, Ethereum can do a lot more.

While Ether can be used as a digital currency, it is not its primary function. The Ethereum platform was created primarily to monetize Ethereum smart contracts and decentralized applications (dApps). However, Ethereum and Ether have been so well received that people have come up with uses for the cryptocurrency that aren’t related to its core feature.

Bitcoin’s market capitalization was about $150 billion at the start of 2020. The market capitalization of Ether is around a tenth of that, at about $16 billion. Bitcoin’s market cap is currently floating about $1 trillion as of May 2021, while Ether’s is now 1/3 the size and rapidly approaching $400 billion.

Users in developing markets, who are often left out of these estimates, are likely to inflate the figures even more. The majority of those users are most likely Bitcoin users.

Another thing, Ethereum’s supply model differs from Bitcoin’s supply model. Bitcoin’s maximum supply will be limited to 21 million BTC in total, whereas the Ethereum platform has an unlimited supply but an annual maximum supply of 18 million ETH. Both, Bitcoin and Ether have a decreasing growth rate of supply: Bitcoins issuance is halved every 210,000 blocks, which is roughly every 4 years. Since 9 July 2016, the block reward is 12.5 Bitcoins. It is anticipated, that it will halve to 6.25 Bitcoins per block on 25 May 2020. Because Ethereum has an annual supply cap of coins its growth rate is slightly decreasing in relative terms.

Since Ethereum is such a versatile network, some people are opting to store their Bitcoin on the Ethereum blockchain rather than the Bitcoin blockchain. A “tokenized bitcoin” is what this is called. The Bitcoin blockchain does not allow for the storage of Ether. Bitcoin, on the other hand, is much more commonly known as a cash substitute; in reality, there is a Bitcoin search engine where you can find things to purchase in Bitcoin.

Risks Factors

Regulatory

In most countries, twelve years after the launch of the world’s first cryptocurrency, bitcoin, controlling the asset remains difficult. Because of the Ethereum blockchain, the questions about ether are on a different stage. Regulators in the United States, for example, are grappling with the types of data that decentralized applications (Dapps) and proof-of-stake blockchains (where Ethereum is headed for its Ethereum 2.0 upgrade) gather regarding their users.

The Financial Crimes Enforcement Network (FinCEN), a division of the Treasury Department, proposed regulations concerning banks, money services providers, and cryptocurrency exchanges in December 2020. Owners of private crypto wallets (also known as self-hosted wallets, unhosted wallets, or even simply “wallets”) receiving more than $3,000 in cryptocurrencies in a day will have to include names and addresses to exchanges.

If applied, such rules may have a significant impact on those who hold crypto on exchanges, as well as users of Ethereum and its dapp ecosystem. The majority of dapp operation is still untraceable, and the ether cryptocurrency’s ease of transferring value around in a pseudonymous manner remains intact. This proposal may be adopted in some form by US regulators, but FinCEN is accepting public comments and industry input until March 29.

Technological

PoS is a very new technology that hasn’t seen mainstream acceptance on the same scale as Ethereum yet. Ethereum 2.0 is a bet that PoS will one day be able to fully replace Ethereum and follow the network’s current user base.

The implementation of Ethereum 2.0 on Ethereum has a higher risk of code glitches and failures than Bitcoin’s Taproot update due to the upgrade’s optimistic goals.

In addition to protocol improvements, both the Bitcoin and Ethereum systems face a particular form of technical risk since they depend on the activity of “mining” for network security. By seizing control of the majority of miner hash power, a hostile actor may launch a “51 percent assault” and censor blockchain transactions or cancel accepted blocks.

Competition

Another common concern about Bitcoin and Ether is the possibility that they will be replaced by a more powerful and stable rival. The main competitors of Ethereum are Cardano, Polkadot. However, given that both are built on open-source code that anyone can recreate on GitHub, this is becoming increasingly impossible.

A rival will have to offer a more appealing and lucrative option to entice Bitcoin miners away. Incentivizing miners to migrate to a new protocol would necessitate achieving comparable levels of consumer confidence and market value.

Ethereum is in the same boat. Even though blockchain interconnectivity becomes seamless, network effects matter due to the strength of the developer network and the sprawling web of complementary dapps.

Market Manipulation

According to a recent study of the top 10,000 Ethereum (ETH) wallet addresses, the world’s second-largest digital asset (by market capitalization and total adoption) could see a huge rise in value in the near future. A few leading crypto asset exchanges and some Ether (ETH) “whale” accounts are also found to be engaging in some dubious activities, according to the report (addresses that hold very large amounts of the digital currency).

Cochran goes on to expose a dozen crypto whale accounts’ different strategies for manipulating the volatile digital asset market. He says that this could be achieved in collaboration with Bitfinex, a leading cryptocurrency exchange, as well as BitMEX, a leading cryptocurrency derivatives trading site.

Quantum Computing

Proof-of-stake cryptoassets like Cardano (ADA), Polkadot (DOT), and Tron (TRX) (and, finally, Ethereum (ETH)) are thought to be less vulnerable to quantum computing attacks than networks like Bitcoin, Bitcoin Cash (BCH), and Litecoin (LTC) because they don’t use PoW. (LTC). However, according to a number of computer scientists and crypto experts, it is the signature scheme, not the coin’s consensus process, that poses the greatest danger to quantum computers.

To put it another way, since the vast majority of PoS cryptoassets still use (non-quantum) cryptographic signature schemes to sign individual transactions, they’re just as vulnerable to quantum attacks as their PoW counterparts. However, the arrival of sufficiently efficient quantum computers is still some time away, and their arrival would almost certainly encourage a widespread transition to post-quantum cryptography.

Future Price Predictions for ETH?

On CoinDesk TV on April 8, Philip Gradwell, chief economist at Chainalysis, said there was little ether bought above the $1,850 support mark, with even less demand at $2,000 or higher.

In the long run, however, the price of Ethereum futures is expected to rise. On the Unchained podcast on April 6, billionaire investor Mark Cuban predicted that after the update, Ethereum will “dwarf” Bitcoin in terms of applications. Cuban said that he now owns “a lot more” ether than he does bitcoin.

Meltem Demirors, the chief strategy officer at CoinShares, told CNBC on April 26 that “the market is changing,” with capital shifting from BTC to ETH. Ether funds and investment products received $34 million in the week ending April 25, while Bitcoin funds lost $21 million.

ETH, according to Raoul Pal, co-founder and CEO of Real Vision Group, will continue to outperform. He said in a series of tweets:

The ETH space is growing at 100% YoY (vs 50% YOY for BTC) and it is attracting a massive proportion of the developer talent and applications too.

At this point in the risk cycle and with ETH 2.0 coming (cheaper fees and less supply), I’m struggling to not sell all my BTC to move my entire core position to ETH.

To be clear – I’m a massive BTC bull, but I think ETH is the better asset allocation for performance right now.

Digitalcoin’s ethereum outlook is optimistic, forecasting a more than twofold increase in value by 2023. The average price is expected to be $4,934 in 2021, rising to $6,165 in 2022, $7,214 in 2023, $10,667 in 2025, and $15,472 in 2028, according to the projection.

How to Invest in Ethereum?

You’ll need a digital wallet if you want to invest in Ethereum, specifically Ether. Ethereum isn’t traded on any of the big stock exchanges. You can’t purchase Ethereum from your online discount broker. You’ll need to put it in your pocket. We suggest Coinbase as a digital wallet because it is extremely user-friendly and allows you to invest in both Bitcoin and Litecoin.

It’s important to note that Ether (ETH) is a currency, and that investors should treat it as such. Ether is not purchased in the same way as stocks or ETFs are. Instead of dollars, you’re trading them for Ether tokens. There are no payouts or dividends. Your only hope is that other people on the Internet will pay you more for your tokens in the future than you paid for them.

Why invest in Ethereum now?

The Ethereum blockchain’s versatility is one of its most appealing features. It’s best known for hosting Ether, but it’s also used for NFTs, decentralized banking, and business blockchain solutions.

To put it another way, it has uses outside of the cryptocurrency environment. Ethereum could be used in a variety of ways even though cryptocurrency as a whole fails in the long run.

Furthermore, one of the most common criticisms of cryptocurrency, particularly Bitcoin, is how energy-intensive it is. Indeed, University of Cambridge researchers report that Bitcoin mining consumes more energy than the entire country of Sweden.

Ethereum, on the other hand, aspires to be more eco-friendly. The technology’s creators are currently working to change the way coins are mined in order to make the process more energy-efficient. This could give Ethereum an edge over Bitcoin, especially among eco-conscious investors.

Additionally, as the Ethereum network evolves, some Ether coins will be lost in the process. However, a smaller supply of Ether could make it more valuable and push up its price, which could be beneficial to investors.

About Savy Fox

SavyFox is an investment blog that writes about various interesting investment topics and shares research and opinions with respect to Stocks, Peer 2 Peer Lending, or Crypto Currency investment opportunities.

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It appears to be the ideal opportunity for crypto traders to declare, “I told you …

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