Ethereum has no competitors, three positive analysis

On the evening of November 18th, Beijing time, the Ethereum Foundation conducted an AMA online Q&A on reddit, a well-known overseas forum, and responded to several important issues involved in the future development of Ethereum.

These issues are not only technical issues, but some are directly related to the future price of Ethereum and are closely related to the interests of investors, so I have selected some important issues to share with you.

1. What is the future circulation of Ethereum?

This is a question of great concern to all Ethereum investors.

Everyone knows that there are only 21 million bitcoins in circulation, and many people regard this feature as the key driving force for the continued rise of bitcoin prices.

But when it comes to Ethereum, the second largest cryptocurrency, there is no upper limit to this circulation. There is no rigid upper limit on the circulation of Ethereum, so many investors always have certain doubts about the future currency price of Ethereum.

This situation did not change until the Ethereum community put forward the EIP1559 proposal. Once this proposal is implemented, it may have a significant impact on the stock of Ethereum. In this AMA online question and answer, several key developers, including V God, gave detailed responses to this.

What is EIP1559? It is a proposal to change the handling of transaction fees in Ethereum.

We all know that in the current Ethereum, every transaction needs to pay a handling fee, and the handling fee of these transactions will be given to the miners. Some time ago, the popularity of DeFi caused severe congestion in Ethereum, which led to a surge in handling fees, and miners earned a lot of money as a result. At one point, the fee income in the Ethereum system exceeded the fee income in the Bitcoin network. .

EIP1559 will change the composition and attribution mode of handling fees.

In terms of composition, this proposal changes the handling fee into two parts: one part is called the basic fee, which is the same for all transactions and must be paid by all traders; the other part is called "tip", It is the part that the trader voluntarily pays for the transaction.

In terms of the ownership of the handling fee, the basic fee will not be paid to the miners but will be completely burned, and only the "tip" will be paid to the miners. The higher the tip, the more likely the trader's transaction will be packaged by the miners first.

Because the base fee will be burned, this creates a deflationary mechanism for Ethereum. The more transactions on the network, the more fees will be burned, and the more obvious this deflationary effect will be.

Now the annual issuance of Ethereum is about 4 million. And when the EIP1559 proposal is implemented, due to the existence of the destruction mechanism, in the future, the newly added coins in Ethereum will only have about 1 million coins except the destroyed coins. Some stock.

So in general,The future dynamic stock of Ethereum will be around 120 million pieces.This amount is about 6 times the total amount of Bitcoin, and the current currency price of Ethereum is less than 3% of Bitcoin. From this, we can see that the price of Ethereum still has a lot of room to rise in the future.

2. The latest progress of Ethereum 2.0.

A very important event happened recently in the development of Ethereum: the development route of Ethereum 2.0 will be greatly adjusted, the original sharding development will be simplified, and the Rollup-based expansion solution will be prioritized.

This plan currently appears to be very feasible, and it is optimistically estimated that it may even be realized by the end of 2021. Once this solution is realized, the TPS of Ethereum can reach 100,000 per second, which is already able to meet the design goals of Ethereum 2.0 and solve the congestion problem of Ethereum.

This greatly advances the progress of Ethereum 2.0 and greatly reduces the difficulty of development.

If this new solution can really progress as expected, Ethereum will reach 100,000 TPS by the end of next year, and there will only be one year left for other existing public chains to survive.

There is no doubt that this will subvert the entire public chain ecology.

3. Grayscale Ethereum Fund has been approved by the SEC.

There is another big news today: Grayscale Ethereum Trust Fund (ETHE) was officially approved by the US Securities Regulatory Commission and became the first publicly listed ETH investment product in the United States. The fund's shares will be traded on the OTCQX, an over-the-counter U.S. market, under the symbol ETHE.

This means that more traders can purchase Ethereum through normal compliance channels, which will open another door for off-market funds to enter Ethereum in the long run.

All of this news is very positive for Ethereum, and it is long-term and deep positive. In this regard, what we investors need to do is to hold the Ethereum in our hands and buy it when the price is low. For other public chains, I still suggest not to take pictures. They don't have much time left, and whether they admit it or not, they are on the way to zero.