The currency price plummeted 44% in 20 days. Is Ethereum really going to be cool?
Editor's Note: This article comes fromA blockchain (ID: yibenqkl), Author: Ratchet, reproduced by Odaily with authorization.
Editor's Note: This article comes from
A blockchain (ID: yibenqkl)
, Author: Ratchet, reproduced by Odaily with authorization.
"Will Ethereum cool down?" More than one investor is asking.
In addition to currency prices, Ethereum is also facing an unprecedented crisis. In the face of endless new opponents, the performance of Ethereum has long lagged behind. And its expansion plan is still far away.
In the attention of the outside world, V God even proposed to use BCH to realize the short-term expansion of Ethereum. Such an expedient measure has been interpreted as "living under the fence".
Where will the beleaguered Ethereum go in the future?
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Weak currency price
Ethereum, which sits firmly in the second place in the market value of the currency circle, is now facing an unprecedented market crisis.
How miserable is the price trend of Ethereum? A set of data can be seen.
On June 27, 2019, the price of Ethereum was reported at $366, reaching a recent high. This price is up 352% from the previous all-time low ($81 in December 2018) and 25.7% from the previous all-time high ($1422 in January 2018). Since then, the price of Ethereum has begun to pull back, with the lowest reported at $192, a 44% drop from its June 27 high.
According to the same statistical rules, also on June 27 this year, the price of Bitcoin was reported at $13,968, hitting a recent high. This price is up 341% from the previous all-time low ($3,165 in December 2018) and 70.3% from the previous all-time high ($19,875 in December 2017). Since then, the price of Bitcoin has begun to pull back, with the lowest reported at $9,056, a drop of 35.2% from the June 27 high.
It is not difficult to see that compared with Bitcoin, the extent to which Ethereum "recovers lost ground" is very limited. In addition, after reaching the recent high, Ethereum has also experienced a more tragic correction, and the price is even close to half.
Many Ethereum investors were deeply disappointed as a result. "BTC rises, ETH stands still; BTC falls, ETH falls accordingly." Someone joked.
In the eyes of some staunch believers in Ethereum, the rise of Bitcoin has even become one of the reasons for the downturn in the price of Ethereum. "Bitcoin's rise has sucked up the blood of the entire currency circle."
The speculation is not groundless. Recently, a number of investors told a blockchain that in the face of the decline of ETH, they have sold ETH and invested in Bitcoin and other currencies with more stable performance recently.
In fact, this small bull market in the middle of 2019 has become a carnival for Bitcoin and its forked coins. BTC led the rise, followed by forked coins such as BCH and BSV. Since then, multiple platform currencies have also risen accordingly. However, the performance of the public chain currency represented by ETH in this bull market is not impressive.
In addition to ETH, the recent high prices of the top three public chain projects EOS, TRX, and ADA by market value are only equivalent to 37%, 18.2%, and 8.7% of the highest prices in history, respectively. Such achievements have lagged behind other mainstream currencies in the recent currency market.
In his view, as the top 2 in the market value of the currency circle, Bitcoin relies on the scarcity brought about by never increasing issuance, and some people regard it as a value storage tool; while the big pie drawn by Ethereum is an unprecedented block Chain Ecology - "Global Computer".
Unlike Bitcoin, Ethereum does not have a total amount of issuance, and additional issuance is made every year. The positioning of its tokens is to act as a "fuel" for mining incentives and DApp operations. "Even if Satoshi Nakamoto disappears, Bitcoin is still alive. And Ethereum needs V God to continuously boost investors' confidence." Zhang Weiqi said.
As the first-generation public chain platform, Ethereum is the creator of the concept of smart contracts and DApps. The currency price of Ethereum is also closely related to its ecology. However, there are few bright spots in the recent technical progress and ecological construction of Ethereum. Its currency price performance is mediocre, which is also expected.
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Crisis emerges
The weak currency price performance has fully exposed the crisis facing Ethereum to the outside world.
The first crisis comes from Ethereum itself.
Today's Ethereum has completed the last hard fork to enter the "quiet" stage - "Constantinople". According to the plan, Ethereum in the "quiet" stage is about to turn to full PoS. In the current transition period, how to weigh the interests of all parties and improve the performance of the platform has become a difficult problem for the Ethereum team.
On the 13th of this month, V God published a tentative article on the Ethereum forum Ethresear.ch-"BCH: Ethereum's short-term data availability layer? ". In the article, V God pointed out that BCH has a large block design, low fees and a friendly community environment, and can become the "short-term data availability layer" of Ethereum.
The so-called "short-term data availability layer" means that before Ethereum achieves its long-term goal of 10M/s, it first uses the large block capacity of BCH to store a part of the data of the Ethereum platform. In the future, Ethereum will still rely on its own strength to achieve data autonomy.
Previously, V God once supported BCH (ABC) in the fork battle between BCH (ABC) and BSV, and the BCH community should not begrudge this favor. However, V God's claim was still criticized by some members of the Ethereum community.
Ethereum user experience designer avsa bluntly pointed out that V God's idea is more like an "inappropriate April Fool's Day joke". And in many overseas communities, there are also countless investors complaining that Ethereum, as the earliest and most mainstream public chain platform, has now been reduced to a situation where it needs to be "sent under the fence".
Anxiety in terms of performance has exposed the second biggest crisis of Ethereum - the emergence of emerging public chains is gradually squeezing the living space of Ethereum.
Data from DAppReview shows that compared with emerging public chains such as EOS and Tron, Ethereum has been crushed in terms of active users and transaction volume, and its transaction volume is not dominant. The only thing that can maintain the market position of Ethereum is the number of DApps accumulated over the years.
Comparison of ETH, EOS, TRON active users, number of transactions, transaction amount, and number of DApps (data source: DAppReview)
In fact, as early as 2018, EOS and Tron surpassed Ethereum in the number of users and transactions. Their performance advantage is also more obvious. The second-level confirmation feature makes these public chain platforms favored by many C-end DApps, especially gambling DApps. And these new public chains that have risen strongly have had an impact on the ecology of Ethereum.
In addition, the third crisis facing Ethereum comes from the decline of the entire public chain industry.
In the eyes of many blockchain practitioners, DApp has gone through years of development, and there are still no phenomenal C-end products, or B-end applications that can change the industry. Therefore, many people are no longer optimistic about the DApp ecosystem, but believe that the hope of the public chain lies in the emerging DeFi (decentralized finance) industry.
However, the DeFi industry is still in its early stages, and it is difficult to carry the banner for the time being. "DApp is at least the 'self-employment' of blockchain players, while DeFi needs the blockchain to be recognized by the traditional financial market." Luo Ziang, a TokenFund investment manager, told Yiben Blockchain.
"In the current blockchain industry, compared with traditional businesses such as platform coins, stable coins, and even mining, public chains are not too 'sexy'." He said.
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what is the future
With bleak currency prices, collapse of faith, and rise of competing products, where will Ethereum go in the future?
According to the established route of Ethereum, it will fully switch to the PoS mechanism in 2020, and introduce sharding, zero-knowledge proof or side chain expansion protocol to achieve a significant improvement in performance and privacy.
However, in these fields, a variety of competing public chain products, including EOS, Tron and even IOST, seem to be moving forward. In terms of PoS mechanism, community governance and staking ecology, the above-mentioned competing products have all been explored to a certain extent.
At the 4th Ethereum Developers Conference (Devcon 4) in October 2018, V God once declared that the processing efficiency of Ethereum 2.0 will be 1000 times higher than the existing version.
“This will make ethereum a real world computer, rather than a smart phone in 1999, which can barely play Snake,” he said.
"Smartphones in 1999" is Vitalik's evaluation of the existing version of Ethereum. In fact, most of the current public chain platforms are like this.
"Now, TokenFund has long stopped looking at public chain projects." Luo Ziang pointed out. "The logic is simple: Everyone knows that investing in smartphones in 2009 will make you a pioneer; investing in smartphones in 1999 will only make you a pioneer."
In his view, although the current digital currency represented by Bitcoin is still in a price rise cycle, the "big boom" of the blockchain has not yet arrived.
"From the big bull market in the second half of 2017, it is not difficult to see that the real prosperity of the entire industry is that a hundred flowers bloom together, rather than a single flower." Luo Ziang said, "A quantifiable indicator is that at the peak of the bull market in 2017, Bitcoin was the largest digital currency in the world. The market cap was only 32 percent. Now, it’s 65 percent.”
From 2017 to the present, the change chart of the market value of Bitcoin in the entire digital currency market (source: CoinMarketCap)
"From another perspective, the reason for this phenomenon is not that Bitcoin is too outstanding, but that the currency circle has had no coins to invest in for many years." Luo Ziang pointed out.
Since 2018, hot spots in the blockchain circle have emerged one after another. Concepts such as DApp, stablecoin, forkcoin, STO, cross-chain, and DeFi have appeared one after another, but they have failed to leave a truly memorable typical case. On the contrary, "traditional industries" such as mining and exchanges, as well as scams such as drumming and passing flowers, and fund trading, have repeatedly become the focus of heated discussions in the circle.
"But the era of the public chain has not come to an end." Luo Ziang emphasized, "The innovative technology of the chain circle will still appear on the public chain platform first, and then land on the consortium chain and other platforms that focus on scenario applications after extensive verification. "
At the same time, the competition in the public chain industry will also shift from competition for gimmicks and operations to a more pragmatic competition for structure and technology. "In the long run, this is also a good thing." Luo Ziang said.
During this period, the fate of Ethereum was full of drama: it changed the industry, caused a sensation, the price climbed to the peak, and then the technology began to stagnate, and it gradually fell into a slump.
* Some interviewees in this article are pseudonyms.
