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Elon Musk and Dogecoin (DOGE) may be making headlines in the crypto universe, but Ethereum (ETH) is no exception.With a new ATH (All Time High) reached a few days ago, Ethereum was the representative cryptocurrency of this “altcoin season”.However, Ethereum is not spared by Elon Musk’s latest statements which seem to have cast a chill in the market.
With a second half that promises to be turbulent for the second cryptocurrency on the market, Ethereum is at a key period that will determine its evolution and trajectory: indeed, after the “Berlin” upgrade last April, Ethereum should integrate another long-awaited update, “London”, before the end of this year.A constantly changing economic model that could backfire
One of the strengths of Bitcoin (which some perceive as a disadvantage) is its fixed economic model which cannot be changed without the backing of the community.
For example, we know that 21 million bitcoins will be created and that a reduction in block rewards (halving) takes place every four years.
Arthur Hayes , former CEO of Bitmex , shared his opinion on the subject, indicating that Ethereum could not be both a reserve asset and the medium of exchange of the largest decentralized network in the world: according to him, the success of Ethereum as a smart contract cannot go hand in hand with its adoption as a store of value.
But as Coinbase pointed out earlier this year, the team around Ethereum is struggling to fix around which value proposition the project is built around.And this instability around the blockchain is reflected in the asset, which decreases its usefulness as a currency:
Money is supposed to be a boring tool for keeping savings in a safe and secure way, and the “deconstruct and rebuild” philosophy adopted by Ethereum (unlike that of Bitcoin) is the opposite of stability.
A real potential for development which should not make people forget the flaws in the network
DeFi and NFTs are the two sectors that have contributed the most to Ethereum’s growth, but they are both still a long way from reaching maturity.Thanks to the development of these sectors, nothing could stand in the way of the realization of Vitalik Buterin’s vision for the blockchain which would then become a “global computer”, provided that its architecture manages to support this growing load.
The successful implementation of the next phases of Ethereum 2.0 becomes imperative to sustaining the viability of the network.
Total Blocked Value within DeFi Source: DappRadar
In the meantime, the implementation of sharding and other scalability solutions could also provide some relief for Ethereum, which recently suffered from network congestion linked to high transaction fees.After the London update which will incorporate Improvement Proposal (EIP) 1559, the developer Nick Johnson (d’ Ethereum Naming Service ) believes that Ethereum’s recurring issues should be resolved: he told Cointelegraph,
“The [le hard fork London] will include the EIP-1559, a much-anticipated overhaul of the transaction fee market, which will have a huge impact on user experience.
However, these positive developments do not seem to impress some analysts who question the real added value provided by Ethereum: protocols and tokens with “dubious” reputation are proliferating on the blockchain, which could lead to a collapse of the ecosystem.
This is not a problem specific to Ethereum and other smart contract platforms like Binance Smart Chain are facing this one.However, it is possible that the network can survive these inconveniences and rebuild itself on a healthier basis.
Moreover, this does not prevent players in traditional finance from paying attention to the Ethereum ecosystem and its many applications, as evidenced by the success of recent Ethereum ETFs.
JP Morgan claimed a few weeks ago that Ethereum could one day surpass Bitcoin (which does not prevent them from preparing to launch a BTC fund and not ETH): a note describes ETH as “the backbone of this crypto-native economy “.The major difference with Bitcoin is that it is seen more as “a crypto-commodity than a currency”.A few days later, the investment firm declared that ETH was overvalued and its value should not exceed more than $ 1,000.There is a certain degree of uncertainty around the Ethereum ecosystem and of course, given its popularity, its competitors are numerous and try to replicate its model, sometimes successfully: Cardano, Binance Smart Chain and Polkadot are the three.first which clearly stand out from the crowd.
It is important to point out, however, that Ethereum’s users and active wallets have grown significantly, which shows that it still has an advantage over others..
