Future of Ethereum?
Ethereum is a decentralized blockchain-based platform on which dapps (decentralized applications) can be built. It enables developers to build smart contracts that execute tasks automatically after meeting specific conditions. It runs using Ether, a cryptocurrency token.
The Future of Ether
As the second-largest cryptocurrency in the world after Bitcoin regarding the market capitalisation at the writing time, Etherum has attracted a lot of attention worldwide. The future of ether is looking bright and a lot of focus is now being put into how the network will cope with the increasing demand.
The co-founder of Ethereum, Vitalik Buterin, said that Ethereum has in place a 3-to-5-year plan for enhancing scalability and increasing privacy. Buterin spoke to the people who attended the Beyond Block Tapei conference, in a talk entitled Ethereum 2.0.
The Ethereum co-founder stated that the title does not mean that there’s a specific update about to be released. It means that the platform is going to be the subject of the series of enhancements that are ongoing.
Buterin called blockchains the public ledger, saying that they have many nodes verifying data: that can lead to issues of privacy. Developers have looked into numerous avenues through which they can make sure users have greater levels of privacy.
The Byzantium Hard Fork that went into effect gives Ethereum a greater capability of supporting cryptographic algorithms. That’s one of the steps of building a solution for increasing privacy. According to Buterin, the privacy problem is about 75 percent to be solved.
Using Less Energy
The Etherum mining uses a PoW (proof of work) concept, which uses a lot of energy. Buterin stated that this problem will also be taken care of when PoS (Proof of Stake) is introduced as mining as it currently stands won’t be feasible anymore.
Casper and Other Upgrades
Ethereum is planning on shifting from a PoW model to a PoS (proof-of-stake) type under the Casper upgrade. Also, it will implement other solutions that are designed to make their network more scalable. This includes sharding, which is a process that involves dividing the blockchain into various smaller component networks. That will allow the processing of transactions to be in parallel, hence increasing the processing speed of Ethereum.
If these upgrades will achieve the desired results, it could help the growth of Ethereum by equipping it better to efficiently handle the increased transaction volume.
The EEA (Enterprise Ethereum Alliance) is aiming at connecting 500 enterprises, technology vendors, academics and startups with subject matter experts of Ethereum. Its list of members will include Santander, Credit Suisse, Intel, ING, JP Morgan, BP and Microsoft.
There’s no cap on the Ethereum’s total supply, with a maximum 18 million ETH annual issuance per year. That means ETH’s relative inflation rate decreases every year, and it’s designed to eventually stabilise, reaching an equilibrium. However, it is expected that the rate of the annual issuance following the Casper update implementation will be much lower.
Competition of Ethereum
In the crowded market of cryptocurrency, Ethereum will face competition from various other blockchain projects. The development and performance of those competitors might have negative or positive implications for the ETH value.
Written by Bob Pattni