The year 2017 was quite friendly to the Ethereum coin. Multiple ICOs used it to distribute their tokens and it experienced significant partnerships in the crypto world. In addition, network congestion in Bitcoin resulted in many crypto traders and investors moving to the Ethereum network. Equally important is the fact that major exchanges have included Ether trading pairs together with bitcoin trading pairs. These latest developments could point to an excellent year for the Ether coin!
Decentralized Applications on the Ether platform
The inclusion of the decentralized applications on the Ethereum network was one of the growth drivers for the coin in 2017. This led to services such as Etherdelta and CryptoKitties, which were among the biggest energy spenders in 2017. With this in mind, it is possible that more decentralized apps coming up on the network in 2018. When that happens, the amount of energy spent on the network will increase, leading to more usage of the coin. In the end, the price of the coin is likely to surge even further. Key projects that may join the Ethereum network in 2018 include:
- Golem—a decentralized supercomputer operating on the Ethereum blockchain, which anyone can utilize for computing resources
- Civic—Ethereum blockchain-based solution for identity verification
- Economy—a platform for digital assets that enables users to generate their own Digital Asset Arrays (DAAs)
- Tenx—a visa-based card that enables users to conduct Ethereum transactions at any point that accepts Visa
- OmiseGO—A universal payment gateway with substantial partnerships in 2017
According to crypto records, Ethereum processed more than 1.2 million transactions daily in the past few weeks. This is four times the amount of transactions that Bitcoin handles on a daily basis. In addition to doing more transactions than bitcoin, the processing charges on the network are relatively lower, compared to the cost of bitcoin transfers. As of this writing, Bitcoin charges $30 for an average transaction and takes between 6 and 7 hours to confirm. On the Ethereum network, which handles four times the load, the charges are $0.60 per average transaction, which takes just a few minutes to get confirmed.
With that trend in mind, it is evident that the Ether coin will lead in scalability, as it is set to experience several improvements such as Plasma, Sharding, Raiden, and Casper (Proof of Stake). Some of these upgrades could take place as soon as the second quarter of 2018, which will definitely increase the maximum load of the network by a big margin. When Sharding and Plasma will secure their place on the network, they will create room for infinite scaling, which, in the end, will enable the Ether coin to meet its demand for global adoption. In the meantime, the network will continue to utilize an adjustable block size limit to keep it going it develops sophisticated scaling solutions.
Effects of Developer Network
According to GitHub, Ethereum is currently the most active blockchain-based project. This is evidenced by the fact that 80 percent of all code updates that GitHub received in the past six months were for Ethereum. This shows that more developers have embraced the cryptocurrency. With the increasing competition for blockchain space, it is imperative for any blockchain-based project to have an active network of developers in order to succeed.
Ethereum having the best developers means that it could be the first platform to initiate groundbreaking technical innovations. Various features are a testament to this, including zero-knowledge proofs (zk-SNARKS), which were included in the network recently.
Metcalfe’s Law of Network Effects
According to this law, the value of a network grows as a square of the number of its users. With this law, experts have been able to foretell the price of cryptocurrencies especially bitcoin and Ethereum quite well. The two cryptocurrencies have experienced exponential growth with an increased user base in 2017.
With the huge fees and long wait times experienced in the Bitcoin network, many people find it harder to use the network. Instead, they turn to Ethereum network to conduct crypto business. This trend can continue in 2018, especially with no end in sight to the scalability issues on the bitcoin network. It is good news to Ether coin holders since there will be a need for more network usage, which will result in an increased market value to match it.
What is Ether?
Ether is a cryptocurrency used to operate smart contracts on the Ethereum network. Just as bitcoin, the Ethereum network and Ether tokens are independent and not regulated or issued by any government or financial institution. It’s a decentralized network managed by users.
Is Ethereum safe?
Ether has been deployed in multiple phases:
The ‘Homestead’ users are working well after staying in a beta mode for several months with no major incidents. However, the network is still an experimental technology. Since it works on a virtual machine, we cannot rule out the possibility of some hitches such as poorly written contracts that may contain bugs.
Why would you invest in Ether?
Unlike bitcoin that allows you to participate in a global financial network, the Ether network enables you to take part in the global computational network. This happens through smart contracts deployed on the Ethereum blockchain. Smart contracts are relatively a new technology in many quarters, but they offer a variety of potential applications in various areas including global supply chains, medical records, financial systems, voting, and others yet to be discovered.
Is Ether tied to the value of the dollar?
Ether, like any other cryptocurrency, operates independently. Its value is not related or tied to the value of any currency in the whole world. The value of Ethereum depends on the activities of buying and selling in the open market. As such, the price of the cryptocurrency can change according to the number of people who would like to buy or sell it at a particular time.
Why does the value change?
You can trade Ether for bitcoin, dollars, Euros, yen, and any other currencies any time of the day or night. Based on the demand for buying or selling the virtual currency, the price can change accordingly, even within the shortest period possible. This simply resembles the way in which stock values can fluctuate according to demand or supply. Since Ethereum is an emerging technology, it comes with a relatively small pool of liquidity and therefore can be volatile.
Is Ethereum the same as credit card or PayPal?
Ethereum works like the Bitcoin network. It enables users to conduct transactions using tokens that signify value in an open network. The primary goal of the network is to operate smart contracts using the blockchain technology and not to act as a form of currency.
Ethereum did well in 2017. With just barely a month into the New Year, we can only wait to see what happens in 2018. All the same, some experts allege that bitcoin and Ethereum will have stability and scalability issues, which will present opportunities for new entrants. However, with the reasons mentioned in this piece, Ether holders may have a reason to smile in 2018.
Image courtesy of Google
Disclaimer: Investing in cryptocurrency carries inherent risks. Before you start, get appropriate advice from a financial expert. Invest only what you can afford to lose.
Know more than others on any Blockchain Party!
Join more than 5000 others to receive the breaking news and weekly summaries! No ICO spam, we promise.