The Ethereum blockchain set the bar high in efficiency, transparency, and innovation. Although a few “Ethereum killers” compete with the distributed ledger, none has reached its expansion and popularity among developers and investors. Anyone can take advantage of the smart contract functionality to build decentralized applications or manage organizations without the involvement of intermediaries.
Blockchain has heavily influenced the value of cryptocurrency since most transactions on built-in tools are made with Ether. Considering how the ecosystem widened, we could make an Ethereum prediction revealing a future price increase of at least 5%.
Ethereum is already moving fast towards the new era of the internet, and we’re here to witness it.
But what will it bring to our world?
Everything decentralized
Decentralization switches control from centralized entities, like the government, to distributed networks that operate globally, such as nodes. Through decentralization, systems can reach a higher level of security and customer trust since they’re not prone to network manipulation, for example. Decentralization reduces points of weakness, whereas centralized systems have a single point of failure that, if compromised, can mean the end of a network.
When it comes to future tools and technologies, decentralization will be mainly used in the following sectors:
- Exchanges;
- Open-source liquidity pools;
- Payments;
- Prediction markets;
Therefore, decentralization will play a crucial role in trades, where users provide cryptocurrencies in exchange for products and services. This might also alter the supply-and-demand dynamic we know today.
Real-world tokenization
The Ethereum blockchain created the ERC-3643 tokenization system through which users can transform anything into a token while benefiting from the following features:
- High security and complete control;
- Interoperability between blockchains;
- Adhering to global regulatory standards;
- Adapting the token’s features to be easily incorporated everywhere;
Tokenization was popular during and after the pandemic when investors bought digital pieces of land after they were tokenized. That’s where real estate tokenization emerged, and it is now leveraged by a few companies to enable fractional ownership of real estate and facilitate investment strategies.
The Ethereum token also contributes to intellectual property management since it can offer creators rights to streamline licensing and access royalty payments. Moreover, tokenization can also be used for a good cause in the case of sustainability since companies can issue and manage carbon credits to support environmental goals.
Decentralized governance model
Ethereum is an excellent example of how governance can be taken to the next level when the decision-making process is based on proposing changes and voting for the best outcome for an organization. Considering how many actors are involved in the Ethereum community, they have the power to settle the best decision for the network, such as:
- Ether holders;
- Application users;
- Tool developers;
- Node operators;
- EIP authors;
- Validators;
The governance model follows several formal steps. It starts with proposing a change at the core of EIP, which will also be presented to protocol developers since they’ll be the ones safeguarding the development. After the final proposal, the EIP will be included in the next network upgrade and activated on the Ethereum Mainnet.
Do these blockchain features influence the price of Ethereum?
There’s a golden rule in the world of cryptocurrencies that includes technological developments as one of the main factors influencing crypto prices. This can be explained easily since improvements lure more investors in. They see great potential in what a crypto project could become if it’s updated. Therefore, they start buying more, triggering a price boost in a certain period of time.
Such a dynamic has occurred before. For example, when the Merge, one of the most important Ethereum updates, was included in the network, prices boomed due to investor enthusiasm. The update would make Ethereum much faster and more sustainable since it switches from PoW to PoS, making the ecosystem more efficient.
Since the Ethereum roadmap includes many more updates for the future, which are most likely to extend over a ten-year timeframe, we’re sure that Ethereum prices will experience other massive spikes after development is over. This dynamic is how many crypto projects maintain their value on the market because they constantly bring new things to investors.
How is the market affected by Ethereum updates?
When new upgrades occur, the boom in Ethereum prices and massive changes affect the entire crypto market. That’s because crypto asset value is linked to the whole ecosystem. If positive news about a crypto’s update floods the internet, investors will change their approach to buying as many cryptocurrencies as possible and exposing themselves to investment opportunities.
For example, this was the case before the SEC approved the first BTC ETF when investors got so excited that they boosted prices up to the moon. As a result of this change, the market flourished and had a bullish moment for a while, after which it returned to its previous condition.
Can blockchain improve more than now?
While it’s already an exceptional technology, blockchain could continuously improve and adapt to the real world. Many experts believe that blockchain could work more on privacy since public blockchains show every transaction made by everyone, anonymous or not.
On the other hand, blockchain consumes a lot of energy due to problems with computing power and scalability. The Bitcoin blockchain, for example, is one of the most energy-requiring networks, while Ethereum has huge problems with scalability as it’s not keeping up with expansion and customer demand.
What’s also to be considered includes the distorted expectations that blockchain will solve all the world’s problems. The truth is that blockchain could pose severe problems if it falls into the wrong hands, which must be addressed at some point.
How do you see blockchain introduced in the real world?
Blockchain is one of the most groundbreaking technologies in the modern world, but its infancy keeps us from leveraging its features. It enhances decentralization, transparency, and efficiency and can be controlled by worldwide nodes, which makes it safe. Currently, the Ethereum blockchain is at the top of the popularity list, but it must solve its problems with scalability.
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