The cryptocurrency marketplace has not been showing much promise in the last couple of years. Yet, cryptocurrency experts have not lost hope, at least, as far as Ethereum is concerned. They predict that it will regain its lost glory, or even surpass it, in 2022. Currently, Ethereum or ETH has a value ranging between $3,000-$4,000. Its fans believe that it will go beyond $6,000 by the year-end. In other words, they are predicting an almost 100% increase in its value. They are even making predictions for 2025, 2030, etc.! Therefore, investors may safely go in for short-term or long-term investments. To open a free trading account click here.
Reasons for Ethereum Regaining its Value
It is commendable that Ethereum has gained such popularity, despite being just six years old. The blockchain network came into being in 2015. Today is significantly active in the virtual world. Ether, its native token, ranks second in market capitalization, and market daily volume.
Such performances have made its fans optimistic about its staying power and high pricing. Outlined below, are the reasons for Ethereum retaining its intrinsic value.
The Ethereum blockchain heralded a revolution in the arenas of technology and finance. It is because its infrastructure displays tremendous potential for healthy progress.
The combination of decentralization and innovative Dapps is already beginning to have a positive effect on various aspects of the financial system. We may see welcome changes in the management of online identity, transfers of mortgages, trading in securities, governance of cryptocurrencies, global marketplaces, etc.
The Ethereum network already promises so much! It is available to anyone and everyone, at every geographical location. Therefore, connectivity via this public network is good. It is no wonder then, that Ethereum has numerous fans in the form of users, developers, etc.
It is one of the best features of the Ethereum platform! Additionally, the blockchain’s own digital currency, which is Ether, comes into play for initiating smart contracts. In turn, these contracts favor decentralized applications or Dapps. Dapps include DeFi (decentralized finance) and NFTs (non-fungible tokens. These apps are marvelous for recurring and specific functions.
DeFi is the power behind many digital currencies, specifically in the decentralized finance arena. It permits peer-to-peer transactions, without the interference of intermediaries, such as banks or financial institutions. Therefore, trading of assets and borrowing/lending of money can take place freely.
The Ethereum blockchain offers over 200,000 ERC tokens. The locked-up value of assets runs into billions. Finally, accounts attract healthy interest rates.
Ethereum wishes to ditch the existing proof-of-work model and initiate a proof-of-stake model instead.
The former expects miners across the entire network to reach a consensus about the verification and confirmation of any financial transaction. When they do so and execute smart contracts, they receive rewards. However, collaboration is not the motto here. Similarly, malicious behavior remains unpunished.
Proof-of-stake goes by the name of Ethereum 2.0. Transaction validators will take over from miners, discarding the necessity to resolve cryptographic challenges. Every validator will own Ether. It suffices to prove if the block is valid or not since the validator must put his/her own Ether at stake. Thus, maliciousness will not go undetected or unpunished.
Regarding rewards, a validator will receive a transaction fee per validated smart contract and transaction.
Scalability and Speed
Bitcoin’s block times stand at 10 minutes. Ethereum’s block times stand at anywhere between 10 and 15 seconds. It is because Bitcoin spends plenty of time checking and confirming security via extensive codes and restricted commands.
A Bitcoin transaction goes through in 40 minutes, while an Ether transaction takes just about minutes.
Ethereum 2.0 is working towards conducting 15,000 transactions within a second!
Resistance to Inflation
Unlike Bitcoin, with its finite supply, Ether promises unlimited supply. However, Ethereum does put a cap on its mining process. It ensures that only a certain amount of Ether comes into play every year. This way, there should be no fears of scarcity in the future.
Additionally, Ethereum enhances supply in alignment with a disinflationary mechanism. Adjustments to this mechanism will continue in alignment with the maturity of the Ethereum network.
Finally, there is the Ether Futures product that promises a lot!