Ethereum (ETH) Price Remains In A Lull Despite Bitcoin’s Recent Price Surge
The news that bitcoin prices were on the way up first appeared on July 14th, 2018 and after two weeks of continuous increases, bitcoin has managed to lock in a 30 percent growth.
Unfortunately, the same cannot be said about the second largest crypto within the crypto verse, Ethereum, as its prices went from USD$434 to USD$475, which is only a 9 percent growth in the last two weeks. Could this possibly mean that its value is slowly dying off? Are investors shying away from the digital asset?
According to a post shared by Coin Gape, the reason for the lack of interest on investors part could be solely due to the inefficiency behind Ethereum. So, what are the concerns associated with Ethereum that needs attention?
Overcrowded Ethereum Network
Ethereum’s network is supposedly compacted due to the fact that many prefer to use its blockchain as the foundation of several projects. Its popular, ERC20 is what many existing tokens are based off of. This is considered a problem, especially given the fact that most Initial Coin Offerings (ICOs) are based off of the Ethereum blockchain and remain there, as opposed to establishing their own blockchain platform or switching out through a MainNet.
This allegedly increases traffic on Ethereum’s blockchain, resulting in an increase in wait time, longer than usual confirmations, and fewer active users to name the least. If this trend lasts, the associated transaction fees, just like Bitcoin’s, is surely to reach new heights.
Another problem that arises with supporting ICOs on the Ethereum blockchain is that a fraction of them have been proven to be scams. This creates a negative impression for not only the projects that users have invested in, but also Ethereum altogether.
The Lack Of Real-Life Uses
The only real purpose Ethereum has its ability to support several ICO projects, token types and DApps. This creates a problem as most consumers, who are yearning for real-life uses of crypto, will fail to understand Ethereum’s handiness.
Ethereum Not Better Than Existing Centralized Systems?
A report published by Forbes revealed that Ethereum only has the capacity to support 15 TPS (transactions per second) which is nothing compared to the centralized system, VISA’s 24,000.
Coin Gape noted that Timothy Young, and several others, takes a neutral stance when it comes to Ether, as he strongly believes that it,
“has an incredible talent pool of developers,” adding that it can “solve a lot of scaling challenges”
in the long run. Young also stated that Ethereum’s short term capacity is limited, as “there’s a disconnect between the price and underlying technology”.
Partner of Tetras Capital, Alex Sunnarborg expressed that just because a concept is strong doesn’t mean that it makes “a good investment”. He further added that Ethereum’s demand was present solely because of ICOs. With regulatory officials constantly running after such offerings, Ethereum could possibly be in danger.
Do you think Ethereum will eventually lose its position as the second largest crypto?