ETH times are changing

Part of this article comes fromdecrypt, original author: Ekin Genc

Odaily Translator |

Part of this article comes from

, original author: Ekin Genc

Odaily Translator |

According to Nomics data, the price of Ethereum reached $3,000 for the first time on Monday (May 3). The price of Ethereum has increased by more than 1300%, and the market value has also hit a new high of 352 billion US dollars.

The price of Ethereum has risen sharply this week, which is both unexpected and reasonable. It was previously reported that the European Investment Bank sold $121 million worth of digital bonds on ethereum, with Goldman Sachs, Societe Generale and Santander all involved, according to Bloomberg. The news is seen as a sign of ethereum's ability to provide strong support across a wide range of financial use cases, based on the ethereum-based bond offering.

The EIB uses Ethereum because the network allows the creation of multiple fungible tokens, also known as ERC-20 tokens. In fact, after Santander Bank used the Ethereum mainnet for its own blockchain bonds in September 2019, and the European Investment Bank also participated in the test, it also means that both recognize the Ethereum network very much.

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ETH times are changing

Many highly anticipated Ethereum updates will go live in the coming months.

On July 14, Ethereum will integrate an upgrade called EIP-1559. The Ethereum network miner fee currently adopts the first price auction mode (First Price Auctions), that is, transactions with higher miner fees are easier to be packaged and confirmed by miners first. In this mode, since the users of Ethereum are all over the world and the transaction demand changes rapidly, it is easy for users to pay excessively high mining fees unconsciously. EIP-1559 uses a mechanism similar to Bitcoin workload proof (PoW) difficulty adjustment to automatically find the dynamic balance of Gas prices. When it is found that the bitcoin mining speed exceeds 1 block per 10 minutes, the mining difficulty of bitcoin is automatically adjusted upward; when the mining bitcoin block speed is lower than 10 minutes, the mining difficulty of bitcoin is automatically downward Adjustment.

EIP-1559 is arguably the biggest upgrade ever made to any cryptoeconomic system. Not only because the proposal would change the monetary policy of ETH, the world's second largest crypto asset, but also because it is a paradigm shift in the way transactions are packaged into blocks in the cryptoeconomic system. EIP-1559 has been officially included in the Ethereum "London" hard fork upgrade, which is expected to be launched in July. According to the law of supply and demand, it is generally expected that EIP-1559 will increase the price of Ethereum after it goes live. Of course, the price increase of Ethereum this time may only be affected by the expected upgrade of EIP-1559.

Another time that may change the "ETH era" is: the transition of Ethereum 2.0. This upgrade will make the Ethereum network switch to the proof-of-stake consensus (PoS) instead of the current energy-intensive workload proof-of-work consensus. The first step in the transition is the so-called merge, tentatively planned for the second half of 2021, and if all goes well, Ethereum 2.0 is also expected to reduce transaction costs and increase network throughput.

Historically, Bitcoin has always led the price movement in the cryptocurrency market, sometimes being dragged down by altcoins including Ethereum - but, times are changing.

Four months ago, many people thought that Bitcoin and Ethereum would go hand in hand and develop rapidly. But not only did Ethereum’s “NFT craze” kick off four months ago, it’s almost reaching fever pitch, and decentralized finance (DeFi), powered by Ethereum, is now bigger than ever.

Money Movers, a website that tracks average daily settlement data on the ethereum and bitcoin networks, found that the transaction volume on the ethereum network is almost double that of bitcoin.

Some people even began to wonder, will Ethereum surpass Bitcoin to become the world's largest digital currency? Let's continue our analysis.

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Can Ethereum 'Flip' Bitcoin?

In terms of total market capitalization, the price surge helped Ethereum surpass big names such as Disney and Bank of America in market capitalization. Ethereum’s market capitalization rose 24% last week to $346.72 billion, according to data from market capitalization tracking site Infinite Marketcap. By comparison, Bitcoin's current market capitalization is about $1.079 trillion, slightly below the market cap of the precious metal silver ($1.416 trillion), but more than social media company Facebook ($923.12 billion).

Therefore, when comparing different asset classes, the percentage of cryptocurrencies deposited on an exchange or effectively changing hands must be considered. In addition, due to the existence of the regulated cryptocurrency derivatives market, institutional investors can also participate in betting on the price of assets, which is also a factor we should consider.

Summarize

Ethereum, on the other hand, has an average of 2,320 developers per month, and while Ethereum is not a "traditional company," decentralized applications (dApps) on its network handle more than 100,000 active addresses per day. Even more impressive, there are over $12 billion in transactions per day on the Ethereum network, and even for an S&P 500 company, these metrics are outstanding!

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