Are you currently an Ethereum investor and want to find out how does the future look like? Or maybe you are worried about making a purchase and want to know if now is a convenient time? Well, look no further as I am going to tell you each and everything that you need to know regarding the future of Ethereum!
Before we jump deep into the topic, here’s an interesting fact: Did you know that in 2017, the price of Ethereum shot-up by almost 10,000%? That’s insane, right?!
Anyway, in this the future of the Ethereum guide, I am going to start by briefly describing what the project is, followed by an overview of some of the problems that will affect its price.
After that, I will be discussing a few of the potential solutions the Ethereum team is working on to resolve their scalability problems. And then finally, I will discuss some popular price predictions and give you my opinion on whether I think it’s a good investment.
What’s The Future of Ethereum?
Even though the Ethereum blockchain is the second most famous in the cryptocurrency industry, it has some issues concerning scalability. (Scalability points to the number of transactions a blockchain can process per second.)
As I mentioned above, Ethereum is only capable of processing 15 transactions per second. In the early days of the project, this was not considered a major issue, as not many people were using it. However, as Ethereum got more fame, it has become the most significant issue for the Ethereum blockchain.
To give you an estimate of how restricted it is, the NEO blockchain (which can also process smart contracts) can reportedly process up to 10,000 transactions per second. Until and unless the Ethereum developers find a solution to their scalability issue, the organizations might consider using other blockchains to host their smart contracts and dApps instead of Ethereum. If this happens in the future of Ethereum, the price will most probably crash.
So, as you can see, this issue is of significant importance.
Luckily, the Ethereum developers are completely aware of these problems and they are in the process of making some massive changes.
Let’s have a look at the potential solutions in more detail.
Do you remember how I mentioned above that the Ethereum blockchain uses the Proof-of-Work consensus mechanism? Well, this is one of the major reasons that has led to Ethereum’s technical problems. As a result, the team is thinking of switching to Proof-of-Stake.
Proof-of-Work needs miners to utilize their additional computational power to solve complex puzzles. Whoever has the most powerful hardware device has a better chance of winning the mining reward. Everyone tries to solve the puzzle at the same time, and the winner is the miner who solves it first.
The future of Ethereum using Proof-of-Stake might also diminish the risks of centralization. Proof-of-Work enables groups of miners to join their resources to boost their chances of winning the mining reward. The issue with this is that it gives a minute number of people lots of influence over the network, particularly those that control large pools of miners. Proof-of-Stake, however, makes this very difficult to achieve.
So now that you know about the Casper project, the next part of my future of the Ethereum guide is going to look at their “Plasma” upgrade.
In 2017, The Plasma project was first announced by Vitalik Buterin in August 2017. This project is being developed to solve Ethereum’s scalability issues. Plasma is a protocol that will enable the Ethereum blockchain to eradicate the need to process redundant data. It will be done by creating a second layer on top of the main blockchain.
It will still possess the ability to process smart contracts, but, it will only post them to the blockchain once the contract has been completed. This will massively diminish the amount of computational power the blockchain requires to confirm transactions and it will also save lots of memory.
The Plasma protocol will also speed up transaction times, which will enable the network to host dApps without slowing the system down.
My Opinion on the Future of Ethereum
Before I go ahead, it is important to understand that you should never invest money into a cryptocurrency based on price predictions alone. Never forget that Ethereum predictions are nothing more than opinions.
If they were always right, we would all be very rich people! The most crucial thing is that you should always conduct your research before making an investment decision.
Anyway, now that I have got that out of the way, I would like to let you know how I see the future of Ethereum going. I believe that it will all come down to Ethereum’s ability to massively boost its scalability levels.
As things stand, 15 transactions per second just aren’t good enough.
Various smart contract platforms can perform much better. If Ethereum doesn’t fix their issues quickly, they could lose out to their competing blockchains. However, the Ethereum project has some of the best developers in the industry and I have full faith that they will not only be able to make the move to Proof-of-Stake but also install their Plasma protocol. Once they can do this, I think the price will go up substantially.