Hello, everyone, Holle. I am Jinmei Blockchain. In 2021, mainstream currencies such as Bitcoin and Ethereum continue to rise and break through record highs in one fell swoop and become one of the most watched assets. In February of this year, the market value of Ethereum reached 230.354 billion U.S. dollars and ranked 34th in global assets, surpassing Nike Pinduoduo and Adobe and other world-renowned companies, Ethereum 2.0. The arrival of Ethereum 2.0 gave many investors a reassurance. Optimistic, but the high transaction fees on Ethereum have become more and more crazy, making many investors dissatisfied. Gas fees have become higher and miners’ income has increased . The total revenue of Ethereum miners in February reached US$1.342 billion, an increase of 60.99% from the previous month. The proportion of transaction fees in the income of Ethereum miners exceeds 50%, reaching 54.05%. Whether the high gas fee can be solved, all parties are still exploring the current Ethereum network is still very congested. Ethereum has been the second largest since its release in 2015.
The blockchain network has attracted much attention. Even though Ethereum has developed into a powerful settlement layer , the total amount of peer-to-peer value transfer in Ethereum has reached billions of dollars, but it is still difficult for investors to identify the investment case. We may take a step back. , Think about the value proposition of Bitcoin: Aims to become a global and verifiable settlement system.
The settlement system is supported by the world’s most powerful computing network and provides security maintenance, allowing users to track the value of Ethereum with a high degree of trust . Ways to achieve verification but its logic and information are more extensive. In other words, Ethereum ensures that applications on the chain operate in accordance with the coded logic. There is no need for third parties or the possibility of interference. Ethereum has created a trusted environment in history. Above, this is a prerequisite for transaction prosperity. Does this mean that Ethereum is better than Bitcoin? Not necessarily-they focus on different fields and make corresponding trade-offs.
Bitcoin becomes solidified and relatively inflexible, which makes people believe that its settlement system will not change arbitrarily. Ethereum is adaptable and flexible and fosters an innovation. Ethereum and Bitcoin have a symbiotic relationship with the constantly iterative environment. Both introduce liquidity, ideas, and value from the external world. Bitcoin is the preferred store of value in the digital ecosystem. However, Ethereum has become the leading financial infrastructure with more than daily transaction volume. 12 billion US dollars. Our video content today is to analyze the current and future value of Ethereum as much as possible. According to my usual thinking and analysis method, I will try to pick the bones first, and then take a look at how perfect the egg goes.
From my understanding of many aspects, I feel that talking about the value of Ethereum is inseparable from ETH2.0. First, let’s take a look at the bones I found. If the four major problems of the POS mechanism are first changed from POW to POS, there must be some Advantages 1. POS saves more energy than POW mining 2. Participating in network operation does not require special ASIC hardware 3.
If there is a node with bad behavior, then his rights will be greatly reduced and the node that does not comply with the agreement will be punished. 4. Theoretically To improve the decentralization of the network, but since I said that POS is a bone, at least in my opinion, the following potential problems of POS cannot be ignored. 1. POS itself is proposed for retail investors unable to participate in the PoW mining model. But it is also based on the number of pledges to evaluate whether the node is competent to determine whether to continue to provide services. In this case, it will inevitably cause vicious competition and make the node party receive tokens from the secondary market. It is not through technical means to continue to work. When the price of the currency drops, this becomes the most bitter pain point of the node side. 2. The Ethereum 2.0 pledge analysis chart that everyone is paying attention to shows that the higher the pledge amount, the lower the profit.
As the price of the currency continues to rise , the cost of participants is getting higher and higher, and the later the gains become less. When the price of the currency drops, investors who enter the market will even reach a situation of unbalanced profit and loss. In fact, looking at it in detail, All liquidity mining is just an upgraded version of deduction. No matter how it is modified, such a factor cannot be changed. 3. Many people's voting rights are meaningless. If you encounter a few big money holders, they will They decide the final voting proposal, and become the object of node scramble. It is just a capital game where the amount of funds determines whether the ranking is top.
This is similar to the Baidu bidding ranking model. For example, we can see that after Unsiwap issued its currency in September. UNI’s governance token, UNI, is still held by some big players. Even if the liquidity mining is cancelled, UNI’s big holders can still influence the governance plan . Many of the proposals have confirmed this without news. 4. Traffic attracts users. , This is the main strategy of Internet companies, and it has also become the main operation method under the blockchain PoS mechanism of the current era .
Nodes with a large number of currency addresses can be used as activities to distribute tokens for the public, but most of them are just attracting some people who are fleeing. The airdrop that caused the tokens to sell UNI, LON, and 1inch in a short period of time just confirmed the pain points under the PoS mechanism. After the airdrop, the number of people who are willing to vote for mining at the node accounted for less . So the above are the factors that I think may lead to the limited value of ETH. But then again, you can’t always focus on the shortcomings of a thing.
If the shortcomings can be properly resolved, and the advantages are irresistible? Will the value of ETH present an unexpected situation? The first advantage is the currency attribute of ETH to the Ethereum ecosystem. As mentioned earlier, Ethereum and Bitcoin have a symbiotic relationship, attracting external liquidity. Bitcoin is the preferred store of value in the digital ecosystem and Ethereum has become the leader. Financial infrastructure, daily settlement of more than 12 billion U.S. dollars and ETH is the local asset of the emerging decentralized financial system and the main source of funding for applications built on Ethereum. ETH plays a new era of digital currency on the Ethereum network. Every time a user deploys a smart contract on the Ethereum network to provide liquidity for applications or trades on a decentralized exchange, ETH must pay network fees. If investors do believe that ETH is a currency, it is worth discussing its relationship with other currencies. Competitor's relative value calculated at the current price. Can ETH gain market share from competitors at a reasonable price? In the decentralized financial ecosystem, the use of ETH as collateral continues to expand.
However, the increase in the use of stablecoins and Bitcoin as collateral for ether may challenge the status of ETH as the preferred collateral in the ecosystem. WBTC is Bitcoin in the ether. The synthetic version on the Ethereum network enables Bitcoin to transmit USDT and USDC on the Ethereum network. It is the largest U.S. dollar stablecoin on Ethereum. The picture shows the growth of WBTC, USDC and USDT, although the growth of alternative assets on Ethereum may be challenging. ETH is used as collateral, but the increase in usage of Ethereum as a settlement network is a positive trend. The second advantage is that ETH is an indispensable part of the Ethereum network. Every transaction on the network will incur a certain fee. The fee is denominated in ETH. As the demand for the network increases, the cost also increases. As a commodity, the price of ETH will fluctuate according to the supply and demand in the market. Fortunately, the Ethereum blockchain is transparent. We can analyze user activities and the potential market for ETH. Explaining the price. We can check the total transaction fees charged by the Ethereum network every day to measure demand. Since ETH is a commodity that pays for these fees, high fees will drive demand for ETH just as increased travel may drive gasoline.
It is also worth noting that the total transaction fee in January 2021 is almost 5 times the peak fee in January 2018. However, the price of ETH is roughly equivalent to the peak price in 2018! ! ! Why didn't the price increase with demand? Maybe it’s not time. The third advantage is that ETH has the opportunity to become an interest-bearing asset. Ethereum has begun to enter the next stage of the protocol development, namely Ethereum 2.0. But here is a reminder that the current progress of ETH 2.0 is still The first phase of Ethereum 2.0 aims to become a scalable proof-of-stake blockchain. This means that holders can use their ETH as collateral and become a validator on the network. This is another key change in the value of ETH. Ethereum 2.0 Transform ETH from a commodity into the productive commodity that we describe. Holders will be able to mortgage ETH to generate interest. This asset structure is different from any other asset structure in the real world. In Ethereum 2.0, ETH can Consumption as a commodity can also be used as a mortgage for cash flow claims. Similar to equity, everyone can hold it, but the person who holds the final meeting is the person who holds a relatively large share.
They can participate in the governance vote to determine whether the proposal is passed or not, while the small shareholders To choose a major shareholder you trust to pledge your own shares, just wait for the income. Its initial value comes from its commodity use and the market's supply and demand dynamics. Those who are confident in the future price prospects of ETH can earn collateral income by collateralizing their assets. This may further reduce the floating supply of ETH. At present, a large amount of ETH is mortgaged, which will reduce the supply available for consumption.
It may play a positive feedback loop on the price of ETH. So in summary, Ethereum is younger than Bitcoin. Moreover, the protocol is still undergoing major changes . The road from ETH1 to 2.0 will be a long one. It will be constantly balanced and constantly compromised. The final ETH2.0 may not give full play to its advantages, but it will definitely be a cross-epoch. As everyone works together and continues to move towards the ideal side, then it is very likely to be updated in the future. There will be ETH3.0 and ETH4.0 until the goal of ETH is reached. Forgive me for giving everyone a bowl of chicken soup and returning to the topic. Considering ETH as a currency, as a consumer product or as an interest-bearing asset, as well as a series of possible results that investors can consider.
At present, based on the price of Ethereum, the price tends to move and potential activities on the network and the recent ETH has gone through one time. After the callback, many indicators of activity address, hash rate and network cost have reached new highs. From my personal point of view, short-term ETH still has a lot of potential in this bull market. It has not been played out. Long-term ETH You have to see what it looks like after ETH2.0 is completely completed. Finally, I want to tell you that my channel is for sharing cryptocurrency knowledge, news and investment opportunities. If you are also interested, you must follow me. If you If you think what I said is pretty good, you must give me a thumbs up.
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