The ETH era is changing

Part of the content of this article comes from decrypt , the original author: Ekin Genc

Odaily Planet Daily Translator | Moni



As the second largest market value encryption currency , Ethernet Square (ETH) The price breaks through the $3,000 mark for the first time!

According to Nomics data, the price of Ethereum reached $3,000 for the first time on Monday (May 3). After breaking the resistance level, the price of Ethereum continued to climb and reached a new all-time high of $3,042, which means that in the past year The price of Ethereum has risen by more than 1,300%, and its market value has reached a new high of US$352 billion.

The price of Ethereum rose sharply this week, which was both unexpected and reasonable. Earlier reports said the European Investment Bank (European Investment Bank) sold $ 121 million of bonds in the Crypto ether Square, according to Bloomberg (Bloomberg) revealed that Goldman Sachs, Societe Generale and Banco Santander are involved in the European Investment Bank Based on Ethereum’s bond issuance, the news is seen as a sign of Ethereum’s strong support capabilities in many financial use cases.

The reason why the European Investment Bank uses Ethereum is because the network allows the creation of multiple homogenized tokens, which are the ERC-20 tokens we all know. In fact, after Santander used the Ethereum main network for its own blockchain bonds in September 2019, and the European Investment Bank also participated in the test, it also means that both are very capable of the Ethereum network.

The ETH era is changing

Many highly anticipated Ethereum updates and upgrades will be launched in the next few months.

On July 14, Ethereum will integrate an upgrade called EIP-1559. The Ethereum network miner fee currently uses the First Price Auctions model, that is, the higher the miner fee, the easier it is for the miner to take the lead in packaging and confirming the transaction. In this model, since Ethereum’s users are spread all over the world, and transaction needs change rapidly, users can easily unconsciously pay excessively high miners’ fees. EIP-1559 uses a proof-of-work similar to Bitcoin (PoW) The difficulty adjustment mechanism automatically finds the dynamic balance of Gas price. When it is found that the speed of Bitcoin block generation exceeds 1 block every 10 minutes, the difficulty of Bitcoin mining is automatically adjusted upward; when the speed of mining Bitcoin blocks is lower than 10 minutes, the difficulty of Bitcoin mining automatically decreases Adjustment.

EIP-1559 can be said to be the biggest upgrade to any encryption economy system in history. This is not only because this proposal will 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 crypto economy system. EIP-1559 has been officially included in the Ethereum “London” hardBifurcationThe upgrade is expected to start in July. According to the law of supply and demand, people generally expect EIP-1559 to increase the price of Ethereum after it goes online. Of course, the Ethereum price increase this time may only be affected by the expected EIP-1559 upgrade.

Another time that may change the “ETH era” is the transition of Ethereum 2.0. This upgrade will switch the Ethereum network to the proof-of-stake consensus (PoS) Instead of adopting the current energy-intensive workload proof consensus. The first step of the transition is the so-called merge, which is temporarily scheduled to take place in the second half of 2021. If all goes well, Ethereum 2.0 is also expected to reduce transaction costs and increase network throughput.

Historically, Bitcoin has always been the first to drive price changes in the cryptocurrency market, and is sometimes dragged down by altcoins, including Ethereum-but times are changing.

At the beginning of 2021, Bitcoin’s “dominance” in the cryptocurrency market accounted for approximately 70%, and Ethereum accounted for 12.8%. Now, Bitcoin’s “dominance” in the cryptocurrency market accounts for approximately 50%, while Ethereum accounts for 14.65%.Binancecurrency(BNB) The “dominance” in the cryptocurrency market has quadrupled to 4%.

Four months ago, many people, Bitcoin and Ethereum, would go hand in hand and develop rapidly. But four months ago, Ethereum’s “NFTThe boom” began to rise, and it is now almost reaching a white-hot level. Not only that, the decentralized finance ( DeFi ) supported by Ethereum is now bigger than ever.

Money Movers is a website that tracks the average daily settlement data of the Ethereum and Bitcoin networks. They found that the transaction processing volume on the Ethereum network is almost twice that of Bitcoin.

Some people even begin to wonder whether Ethereum will surpass Bitcoin to become the world’s largest Crypto currency? Let us continue the analysis.

Can Ethereum “flip” Bitcoin?

In terms of total market value, the price surge has helped the market value of Ethereum surpass well-known companies such as Disney and Bank of America. According to data from the market value tracking website Infinite Marketcap, the market value of Ethereum increased by 24% last week, reaching 346.72 billion U.S. dollars. In contrast, the current market value of Bitcoin is approximately US$1.079 trillion, which is slightly lower than the market value of the precious metal silver (US$1.416 trillion), but exceeds the market value of the social media company Facebook (US$923.12 billion).


Such an amazing performance even prompts people to start speculating again that Ethereum can “flip” Bitcoin, thus surpassing Bitcoin to become the world’s largest Crypto currency. In 2021, the price of Ethereum (ETH) increased by more than 200% (as shown in the figure below), causing its market value to soar to US$364.2 billion, and it is now ahead of the market value of companies such as Procter & Gamble (US$326 billion) and PayPal (US$308 billion) .



The market value of a cryptocurrency is obtained by multiplying the last transaction price of the cryptocurrency by the total number of outstanding tokens. This indicator does not quite reflect the average price at which most investors trade. For investors in traditional finance, “value” is evaluated by comparing multiples and valuations, and then calculated based on earnings, sales, and market share. From this perspective, Ethereum (ETH) is a “multi-faceted” asset that is difficult to evaluate, because so far, there is basically no bullet-proof metric available to evaluate the value of Ethereum. The connection between ETH and potential, because ETH can serve as a store of value and at the same time is a Crypto token required to access the Ethereum network.

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

On the other hand, Ethereum has an average of 2,320 developers per month. Although Ethereum is not a “traditional company”, the decentralized applications (dApps) on its network process more than 100,000 active addresses every day. What’s more impressive is that there are more than 12 billion U.S. dollars in transactions on the Ethereum network every day, even for a S&P 500 index company, these indicators are very good!

to sum up

David Hoffman, the founder of the Ethereum media company Bankless, believes that for Ethereum, the “London” hard fork, the implementation of EIP-1559, and the transition of the proof of stake consensus of ETH 2.0-equivalent to three The independent “Bitcoin halving”, just as the “Bitcoin halving” can boost the price, this series of measures will also promote the price of Ethereum.

The era of ETH is changing, is it just the beginning? Let us wait and see.

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