As frightening as the above title may sound, the ETH price might go to zero. This is according to several observations by crypto enthusiasts about the technical difficulties the platform is having in scaling. Global Coin Report recently published a piece on how the Stellar network is more advanced than that of Ethereum. In the piece, Stellar was discussed as having a higher throughput that Ethereum as well as being more secure.
It is also with a similar observation that Jeremy Rubin – a technical adviser to Stellar, a Bitcoin Core contributor, investor, and adviser to crypto startups and a freelance consult for cryptocurrency tech – had this to say about Ethereum in a recent TechCrunch post:
“Here’s a prediction. ETH — the asset, not the Ethereum Network itself — will go to zero. Those who already think that ETH will not see real adoption — thanks to a failure to scale, to adopt more secure contract authoring practices, or to out-compete its competitors — don’t need to be convinced that a price collapse would follow as a consequence.”
Life on the Ethereum Network without ETH
He would go on to postulate that the ETH price will go to zero as a consequence of the Ethereum network thriving. The network might reach a point where it will not need ETH to pay for transaction fees on the network.
“But, if one believes that Ethereum will succeed beyond anyone’s wildest dreams as a platform then the proposition that ETH (as a currency) will go to zero will take a bit more convincing running a substantial share of the world’s commerce securely.”
At first, it sounds a bit confusing given the fact that ‘Gas’ in the Ethereum network is paid in ETH. With a thriving Ethereum network, the ETH price will surely go up using traditional laws of economics such as supply and demand.
ETH price not in the Value Proposition of ethereum.org
Jeremy Rubin points out that the digital asset of ETH has been left out of the value proposition given by ethereum.org. The omission of ETH as an asset in the value proposition is grounds to state that it can be replaced in the Ethereum network, thus leaving room for a scenario where its value will automatically fall to zero.
How Will All This Happen?
Firstly, the fees paid to process transactions on the Ethereum network are simply known as ‘Gas’. The latter is a metaphor similar to the fuel used in gasoline-powered vehicles. This fuel can be changed through a slight modification of the engine or changing it completely like how Elon Musk is doing it with electric vehicles. Therefore, with no hard requirement for ‘gas’ to be in ETH, the digital asset can be replaced with another.
The paying for ‘gas’ in a non-ETH asset is sometimes referred to as economic abstraction in the Ethereum community. Miners can be incentivized to mine transactions with another digital asset as a reward.
But the economic abstraction of ETH meets a few challenges such as developing appropriate software to support such a change. There is also getting the approval of the Ethereum community to orchestrate such a hostile takeover of their favorite digital asset.
In conclusion, and according to Jeremy Rubin, there is a hypothetical situation where the ETH price drops to zero if applications on the Ethereum network can run without the digital asset as ‘gas’ for transactions. This situation is a 180-degree turn from the usual thought that the value of ETH will drop due to congestion issues on the network. In the case of the latter, the Ethereum core developers will probably have a solution in the future to solve the scalability issues.
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.
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Aluna.Social is a Compelling Social Platform for Crypto Traders and Investors
When one thinks about the social media landscape, the companies that first come to mind are most likely Facebook, Instagram, LinkedIn, and Snapchat. These platforms are a great way to stay connected with friends, families, and colleagues, especially when geographic distance is a factor. But, in addition to just chatting about life in general and sharing pictures, social media can be used to bridge the information gap that exists within the investment community.
Over the last decade, many trading offices have been established in large cities all over the world which allow solo traders and investors to pay a monthly fee in exchange for a workspace. The real benefit to trading in these offices is to participate in the free flow of trading ideas and information. Proprietary trading is one of the most challenging careers to be successful at and the exchange of ideas is almost required in order to succeed. Traders at hedge funds and investment banks work in teams so why shouldn’t remote traders?
While these trading offices are a great way to help bridge the information gap, Aluna.Social may provide an even better way, especially as it relates to cryptocurrency trading.
Aluna.Social, founded by Alvin Lee and Henrique Matias, is a multi-exchange social trading terminal for crypto traders and investors. The goal of the platform is to help newcomers shorten their learning curve,…
CoinFlip Scores Big with BRD Wallet Partnership
As the crypto markets move closer to mass adoption, one of the keys for future success will revolve around attracting as many market participants as possible. While many crypto users are extremely tech oriented, a lot of those on the sidelines are not. The cause of waiting on the sidelines could be due to a variety of reasons such as fear of the unknown, lack of knowledge, age, or a combination of all of the above. In order to entice new users to join the crypto revolution, crypto ATMs are rising up across the country. Of those, the largest and most influential crypto ATM company by a significant margin is CoinFlip.
In early October, CoinFlip announced on its Twitter that it had officially partnered with BRD Wallet to re-introduce their crypto ATM map. Now, BRD wallet users will be able to locate their nearest CoinFlip ATM and receive a 10% discount for both buys and sells. BRD brand awareness is growing quickly within the crypto community thanks to its innovative and entrepreneurial spirit. The team strongly believes in the value of financial freedom and independence, and want to empower people across the world by leveraging the possibilities that Bitcoin and other cryptocurrencies provide.
Cryptocurrencies are already making a huge difference around the world. Citizens of Venezuela, a country devastated by rampant inflation, have been using several cryptocurrencies…
Cryptocurrency Collateralized Debt Positions Are Growing in Popularity
While Bitcoin (BTC) continues to hover around the magical 10,000 price level, altcoins continue to fight an uphill battle. Simply put, hopes of a future bull run continue to diminish as Bitcoin maintains its dominance. One school of thought is that a few altcoins will survive and flourish, but which ones are anyone’s guess. That being said, it’s hard to go wrong picking against the top coins like Ethereum (ETH), Ripple (XRP), Litecoin (LTC), and EOS. These projects have managed to find a foothold in the market and have a better chance than most of staying there. While traders wait for their positions to increase in value, one opportunity that may be worth looking at is initiating a collateralized debt position.
What is a Cryptocurrency CDP?
In traditional terms, a CDP is essentially putting up collateral in order to receive a loan against the deposited amount. There are several examples of this in our day to day lives. Auto title loans from large companies like TitleMax are extremely popular with consumers. Consumers are essentially able to use their car as collateral in exchange for a cash payment which can then be used for whatever needs the consumer has. The consumer can continue using their car as long as debt payments are made.
The same concept applies to cryptocurrency CDPs. Consumers are able to put up crypto tokens, such as…