Cut to the chase. Why Ethereum’s Growth Potential is Too Big to Ignore?
1. Launched in 2015, Layer 1 , Ethereum is the world’s first functional blockchain, allowing the ability for smart contracts to be built on top of the network & the second largest cryptocurrency by market cap after Bitcoin. Large market cap means less volatility and risk.
2.Adoption and use cases of the Ethereum blockchain are significantly higher than for any other blockchain network. 380k Ethereum Daily Active Addresses and growing. Consider the Network Effect , product or service gains additional value as more people use it.
3.ETH is the most popular choice for DEFI and NFT . For example it accounts for 75% of the total NFT volumes and 70% for DEFI. In other words, there is demand for ETH.
4.After the EIP-1559 update ETH is now a deflationary asset. Whenever an Ethereum transaction occurs (such as purchasing or selling NFTs or sending ETH to a friend, etc. A portion of it is burned. In fact around 11 000 ETH is burned per day , that’s around 20million in USD per day.
5.Ethereum has the biggest ecosystem of decentralized applications (dApps) compared to any other cryptocurrency out there. More than 6,200 decentralized projects are active on the Ethereum blockchain and more than a million transactions are carried out every day.
6.Ethereum dominates developer activity with 1,873 full time developers — which is more than the next three highest ecosystems combined: Polkadot (752), Cosmos (511) and Solana (383). More developers > more stuff being built > more user cases and users > higher ETH demand > higher price.
7. ETH has officially migrated from Proof of Work to the proof-of-stake (PoS) reducing 99.95% reduction in energy and becoming way more environmentally friendly compared to Bitcoin. Investors gravitate to companies with strong and authentic environmental-friendly values. As it stands now environmental friendliness is one of the predictors of long-term project financial success.
8. Layer 2 scaling solutions are gaining huge popularity. For example MATIC is an ERC-20 token that helps Ethereum to scale, speed up transactions and grow Ethereum-compatible projects and blockchains. In other words, Layer 2s are improving Ethereum usability.
Exploring the Future of Finance: A Deep Dive into Ethereum’s Potential
Essentially, the ETHEREUM project wanted to:
Fill the gap that Bitcoin left and act as a foundation for decentralized applications to build upon for Future of Finance.
It did not specifically intended to launch a digital coin which would become the second largest cryptocurrency by market cap. But the project has ultimately done both: filled the gap left by BTC and created the second largest crypto coin by marketcap.
More than 6,200 decentralized projects are active on the Ethereum blockchain and more than a million transactions are carried out every day. ETH also accounts for 75% of the total NFT volumes, making it the “largest kid” in the NFT block.
ETH – Burning of Billions. Ultra – Sound Money ?
EIP-1559 is to blame for the burning of billions. No, that is not R2D2’s cousin’s name. For the previous 536 days, approx 4 ETH have been burned on average once every minute. In fact around 11 000 ETH is burned per day , that’s around 20million in USD per day.
August 2021, changes were made to the structure of gas fees and the compensation of miners in EIP-1559 (proposal for improving Ethereum.
You see, prior to EIP -1559, Ethereum users would engage in price competitions with one another to convince miners to complete their transactions. Everybody else would have to wait while the highest bidder was chosen.
By instituting a base fee, EIP-1599 modified this. Eliminating the large bidding wars.
It also unveiled a brand-new burning system. The base fee is deducted from the available supply of ETH and burned. (i. E. It is delivered to a wallet that is inaccessible to anyone)
As a result, whenever an Ethereum transaction occurs (such as purchasing or selling NFTs or sending ETH to a friend, etc. A portion of it is burned in the EIP-1559 bonfire.
Fun Fact: Ethereum Mafia
- The cryptocurrency and smart contract platform Cardano, developed by Charles Hoskinson, released in 2017.
- Founder of Decentral, Anthony DiIorio who was an early Ethereum investor.
- ConsenSys, a blockchain technology company founded for Ethereum developers launched by Joseph Lubin.
- Gavin Wood is the originator of the Polkadot blockchain (fun fact: he also coined the term “Web3”).
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