Here’s What The Experts Think Will Happen To Ethereum This Year…
As most of our readers probably already know by now, Ethereum is an open-source platform that has been devised to help developers create smart contracts and dApps that are free from the interference of third party entities. Also, the platform comes prebuilt with its very own currency, Ether, that is based on blockchain technology and makes use of a distributed ledger system.
Ethereum’s Rocky Financial Journey
Over the course of the past few years, Ethereum has transformed into a legitimate ‘store of value’ — so much so that the premier altcoin was able to scale up to an amazing price point of $1,400 during December 2017.
With that being said, owing to a host of different economic factors, predicting the price of Ethereum has never been easy— especially since its role has been considerably different from that of Bitcoin (another crypto asset that has experienced massive economic turmoil over the past year or so).
(i) Matt De Silva: Matthew is a crypto analyst who has been critical of Ethereum and Vitalik Buterin from the very start.
For example, he had predicted that the asset would drop to around the $180 mark last September, following which, it would continue its descent into the abyss.
Additionally, Silva has also stated in the past that Buterin’s Ethereum platform was launched prematurely as a result of which the system “lacked an equitable distribution model”. If that wasn’t enough, he also believes that Ethereum has not been able to have a major impact on the market at large — expect for the fact that it was a major contributor to the crypto bubble of 2017.
— Matthew De Silva (@matthewde_silva) September 12, 2018
(ii) Aayush Jindal: According to analyst Aayush Jindal, Ether is all set to witness more economic stagnancy as we move into the future. In his opinion, if the premier cryptocoin is not able to rise above the $515 mark, it will continue to slide and maybe even drop below its current levels.
In a recent interview with Express.co.uk, Jindal was quoted as saying:
“The current technical structure will remain negative as long as the price is below $515, but a successful 2-hour close above this level may perhaps decrease the current bearish pressure and open the doors for a fresh upward wave. On the flip side, the recent low of $477.31 may act as decent support, the next buy zone being around $450. Overall Ether could consolidate in the short term, but it remains at risk of more losses until there is a break above $515.”
(iii) Joseph Raczynski: According to Raczynski’s recent posts on Twitter, the crypto analyst firmly believes that Ethereum still has the potential to scale up to the $1000 mark sometime this year.
Also, in an interview with Finder.com, Raczynski went on record to state that he would not be surprised if Ethereum witnessed a massive economic surge in the near future, and rose to a price point of $1200 by the end of Q1 2019.
He based his bold predictions on the following analyses:
- ETH’s Proof-of-Concept protocol has been gaining more and more traction amongst leading institutional investors.
- Ethereum currently boasts one of the largest and most active developer pools in the world.
(iv) Clem Chambers: The ADVFN topman is of the opinion that Ether will most likely scale back to it’s all-time-high value of $1400 by the end of this year. This, in Chambers’ opinion, will happen because of rising consumer interest and overall demand for crypto assets.
In this regard, while speaking with Forbes recently, Chambers went on to state the following:“The past doesn’t predict the future blah blah blah…. But you would be a fool not to watch for Ethereum and Litecoin to start rallying as a potential signal for the crypto market bottom we are all waiting for and last year it gave plenty of advanced warning, so will likely do so again after the ‘Bitcoin is Dead’ headlines hit the mainstream press.”
(v) Nigel Green: The deVere Group Boss believes that Ethereum has the potential to scale up to around the $2,500 mark by the end of the year. This, in his opinion, will happen because of the following reasons:
- The number of use cases associated with ETH (in relation to other platforms) has been on the rise over the past 6-12 months.
- More and more companies are starting to see the benefits of using smart contracts — digital tools that can be easily employed within the Ether ecosystem.
- Nigel believes that the “decentralization of cloud computing” will help drive the price of Ether much higher as we move into the future.
(vi) Steven Nerayoff: Mr Nerayoff believes that by the end of December, Ethereum will close in on the $3,000 mark. This is because the currency’s ecosystem is currently being used by a number of firms who have pumped in billions of dollars into the digital asset.
With that being said, it is also worth noting that Steven had previously predicted that Ether would be sitting at a comfortable price-point of $1,000 by the start of January 2019— a forecast that has not yet come to fruition.
(vii) Olaf Carlson-Wee : Polychain Capital CEO and well-known crypto analyst Carlson-Wee believes that 2019 will see Ether scale up to a value of at least $7,000. Carlson’s prediction is based on the fact that Ether’s native programming language is devised in a way that will help the asset grow as we move into the future.
However, as things stand, ETH’s overall market cap still lags behind XRP’s.
Additionally, in an interview with a respected media outlet during late-2018, Olaf went on record to say:“In Ethereum, this programming language is much more expressive and its higher level…so what we’ve seen in Ethereum is a much richer, organic developer ecosystem develop very, very quickly, which has what driven Ethereum’s price growth, which has been much more aggressive than Bitcoin…so maybe by the end of 2018.”
(viii) Jeff Reed: While most analysts claim that Ethereum will touch/hover around it’s ATH value by the end of 2019, Reed is of the opinion that the asset will become “more valuable than Bitcoin” in the coming few months.
In Jeff’s opinion, the Ethereum ecosystem not only has more technical capabilities than BTC but also comes with other dev-oriented tools that could very easily see the price of Ether soar above Bitcoin by the end of this year.
However, at the time of writing this article, Ethereum is sitting at a meager price point of around $115.
(ix) Brian Schuster: Even though Ether is struggling to stay above the $100 mark right now, Brian Schuster believes that the currency is destined to reach a price-point of at least $100,000 by the end of this year.
According to Schuster, the head of Founder Solutions, ETH will be able to achieve this feat because of its amazing SoV capabilities.
If that wasn’t enough, Schuster also believes that Ethereum can possess a market capitalization of $10 trillion within a few years time.
Last but not least, the crypto bull was also quoted as saying:“What if you believe that Ethereum is less like one individual business and more like a store of value, like gold? This gives us a potential market capitalization of roughly $10 trillion, leading us to believe that the price of Ethereum might rise as high as $100,000 per coin. We might even go one step further and say that Ethereum is not like one asset, but an asset to replace all currency that exists.”
In rounding off this article, it is also worth mentioning that some independent analysts such as Mycotoxin and Keops (TradingView.com) are also of the opinion that Ether is destined to start rising within the coming few weeks and months.
It now remains to be seen how the future of this premier cryptocoin plays out from here on out.
Ethereum (ETH) Is On The Verge Of A Game Changing Crash
Ethereum (ETH) broke past $200 in an impressive run up yesterday as the price shot straight past the 50 EMA on the 4H time frame breaching the 38.2% fib retracement level from the local top. RSI on the 4H chart for ETH/USD shows that the price is now trading under overbought conditions but if circumstances were different, this may not have stopped it from rallying higher. However, the reality on ground is that Ethereum (ETH) remains in bear trend despite the recent bullish move. The descending triangle that ETH/USD is trading in could end in a lot of blood especially because the next crash is going to be a game changer. The decline below $180 will convince a lot of traders that they have been wrong about the bear market being over or altcoin season being around the corner.
The ICO space is full of scams that are just ready to unfold. When the proverbial hits the fan, we are going to see a lot of these ‘projects’ declare bankruptcy and all of that is going to terribly hurt the altcoin market and coins like Ethereum (ETH) that have been used for such scams are going to be under fire from regulators and investors alike. It is true that there are some very hardworking teams in this space that really want to see this space succeed and they are more interested in the tech than the money but the fact remains that unregulated markets like these attracts all kinds of people and in the absence of meaningful regulation, investors are not protected which means founders of these scam ‘projects’ can just get away with anything. Of course, the end result of all that is that it brings a bad name to the entire space.
I’m a strong believer in the idea that news events or similar developments follow what is happening on the charts. So, if the price is poised for a decline, we will find a reason that supports the crash. Most of the times, it is either an exchange hack, regulatory crackdown or a ban. If we take a look at the daily chart for ETH/BTC, there is no way this looks bullish in any way. The price remains within a descending channel and it has yet to break past the trend line resistance.
Conditions are now ripe for Ethereum (ETH) to begin its next decline which I believe will have game changing consequences. Confidence in altcoins is going to decrease further and when that happens more of the scams in this space will get exposed which is going to induce more fear in the market that will in turn hasten the inevitable which is Ethereum (ETH) falling to a price of $60 or lower toward the end of this bear market. There are a lot of people that are even more bearish calling for Ethereum (ETH) to go to zero but I don’t think that could happen. I wouldn’t discount a move to a single digit price but I don’t see ETH/USD going to zero despite all its flaws, shortcoming and unreasonable valuation.
Ethereum market update: ETH/USD briefly surges to stay above $200
- Ethereum momentum has stalled $202.43 following a 3.15% rise on the day.
- Bulls must defend $200 support in order to stage a break above $205 resistance.
Ethereum hovers above $200 following a new week’s price action. The weekend session was particularly bullish for ETH. The bulls managed to escape the bear range between $180 and $190. This price action set the ground for the breakout above $200 on Monday.
At the time of writing, Ethereum bulls have control over the price. However, the momentum has stalled $202.43 following a 3.15% rise on the day. The 50 Simple Moving Average one-hour is expanding the gap above the 100 SMA one-hour as a key indicator that the buyers will win the confrontation with a break above $205 (seller congestion zone).
Technical analysis suggests the buyers have the upper hand. The Moving Average Convergence Divergence (MACD) is moving higher within the positive territory. The positive divergence signals rising buying power.
Moreover, the Relative Strength Index in the same one-hour has entered the overbought region. On one hand, this shows bullish pressure being at the peak. On the other, it could mean an impending reversal due to the overbought conditions. In spite of all these, if buyers manage to keep the price above $200, they will get time to stage another breakout.
BTC/USD 1-hour chart
What is Sharding? Guide to this Ethereum Scaling Concept Explained
As the scaling debate in cryptocurrencies continues, some potential solutions have actually been in development for quite some time now.
Specifically, in the case of Ethereum, where a large focus is placed on decentralization and security at the expense of scalability, the application of sharding in conjunction with implementing Proof of Stake consensus is seen as the much needed mechanism through which the network can scale to practical levels for applications while still retaining its decentralization and security.
Sharding is a complex topic, especially when applied to a decentralized, peer to peer network such as Ethereum where the global state of the network constantly is updated. So what exactly is sharding and how can it help blockchain networks to scale?
Sharding and Distributed Computing Background
Sharding is actually much older than blockchain technology and has been implemented in a variety of systems from business database optimizations to Google’s global Spanner database. Essentially, sharding is a particular method for horizontally partitioning data within a database. More generally, the database is broken into little pieces called “shards”, that when aggregated together form the original database.
In distributed blockchain networks, the network consists of a series of nodes connected in a peer to peer format, with no central authority. As is the case with current blockchain systems, each node stores all states of the network and processes all of the transactions. While this provides the high level security through decentralization, especially in Proof of Work systems such as Bitcoin and Ethereum, it leads to legitimate scaling problems.
Using Ethereum as an example, a full node in the Ethereum network stores the entire state of the blockchain, including account balances, storage, and contract code. Unfortunately, as the network increases in size at an exponential pace, the consensus only increases linearly. This limitation is due to the communication needed between the nodes needed to reach consensus.
Nodes in the network do not have special privileges and every node in the network stores and processes every transaction. As a result, in a network the size of Ethereum’s, issues such as high gas costs and longer transaction confirmation times become noticeable problems when the network is strained. The network is only as fast as the individual nodes rather than the sum of its parts.
Sharding helps to alleviate these issues by providing an interesting, yet complex solution. The concept involves grouping subsets of nodes into shards which in turn process transactions specific to that shard. It allows the system to process many transactions in parallel, thus significantly increasing throughput.
A simpler way to put it would to be imagining the division of the United States into states. While each state (a shard in this case) is part of the larger United States (Ethereum network), they have their own specific rules, boundaries, and subsets of populations. However, they do share a universal language and culture as part of their larger network that makes up the country.
Or even better, in Vitalik Buterin’s own words:
“Imagine that Ethereum has been split into thousands of islands. Each island can do its own thing. Each of the islands has its own unique features and everyone belonging on that island i.e., the accounts, can interact with each other AND they can freely indulge in all its features. If they want to contact other islands, they will have to use some sort of protocol.”
As you can see, the concept of fragmenting the network into more efficient pieces allows the network to function as the sum of its parts, rather than being limited by the speed of each individual node.
How Does Sharding Work in Blockchains?
We will continue to use Ethereum as an example in this as it is the most well-known and arduous sharding attempts in the blockchain arena, as the Ethereum developers are implementing what is known as “state sharding”.
The current state of the Ethereum blockchain is known as the “global state” and is what everyone can see when they look at the blockchain at a specific instance. The tricky part in implementing sharding in Ethereum is that by sharding the nodes into smaller subsets, these subsets need to be able to process specific sets of transactions while simultaneously updating the state of the network, all while ensuring it is valid.
Sharding in Ethereum is supposed to be implemented in a two phase rollout, more than likely after Proof of Stake is implemented in the network. Phase one will be the data layer consisting of the consensus of what data is in the shards. Phase two is the state layer. All of this is very fluid, so a general breakdown of how it may work is below.
Ethereum breaks down the network into specific shards. Each shard is assigned a specific group of transactions that is determined by grouping specific accounts (including smart contracts) into a shard. Each transaction group has a header and a body that consist of the following.
- The shard ID of the transaction group
- Assignment of validators through random sampling (verify the transactions in the shard)
- State Root (state of the merkle root of the shard before and after transactions added)
- All of the transactions that belong to the transaction group that are part of the specific shard.
Transactions are specific to each shard and occur between accounts native to that shard. When transactions are verified, the state of the network changes and account balances, storage, etc are updated. In order for the transaction group to verify as valid, the pre-state root of the transaction group must match the shard root in the global state. If they match, the transaction group is validated and the global state is updated through the particular shard ID state root.
Instead of only containing a state root, each block of the Ethereum blockchain now contains both a state root and the transaction group root. The transaction group root is the merkle root of all of the transaction groups from the specific shards for that block of transactions. Basically, there is a merkle root of all of the different shards that contain the updated and verified transaction groups. This root is stored in the blockchain along with the updated state root.
The employment of merkle tree concepts in this structure is vital to ensuring validity of the blockchain. Understanding how a merkle tree and specifically a merkle root work, can help you to grasp these concepts much more easily.
Read: What is a Merkle Tree ?
Consensus within a shard is reached through a Proof of Stake consensus of randomly selected nodes that are applied to a shard for specific consensus round. This not only provides finality to the consensus, which is necessary within the shards, but also provides a particular defense to an attack that a Proof of Work blockchain would be susceptible to in this instance.
The hash power required to overrun a specific shard in a PoW sharded network is drastically reduced and the ability for a malicious actor to take over a shard through computational power is feasible. Through this, the bad actor could attack other shards through the communication protocol which is one of the more complicated and important features of sharding architecture. Random sampling selection of the validators within a shard manages to stifle this type of attack since a bad actor will not know which shard they are being placed in before they are actually placed in it. Further, random sampling will be used to select the validators that are actually validating from that random validating set.
The communication protocol is vital to the sharding architecture functioning correctly in the system. You can think of the communication protocol as the universal language that is consistent among the states as part of the larger United States. However, designing this protocol is highly challenging and needs to be performed so that it is only used when necessary. It becomes necessary when a specific node requires information that is not stored within its own shard and needs to find the shard with the requisite information. This communication is known as cross-shard communication.
The cross-shard communication is achieved through applying the concept of transaction receipts. The receipt for a transaction is stored in a merkle root that can be easily verified but that is not part of the state root. The shard receiving a transaction from another shard checks the merkle root to ensure that the receipt has not been spent. Essentially, the receipts are stored in a shared memory that can be verified by other shards, but not altered. Therefore, through a distributed storage of receipts, shards are able to communicate with each other.
Sharding Moving Forward
Sharding in Ethereum is expected to be implemented after the Casper PoS upgrade. Recently, there have been some developments regarding Ethereum 2.0which involve implementing both Casper and sharding. Casper seems to be slated for 2019 while sharding will follow in 2020 or 2021.
Sharding has also been implemented in a few other platforms, most notably Zilliqa. However, Zilliqa does not implement state sharding at this time and instead focuses on providing a high throughput blockchain by utilizing transaction and computational sharding.
Read our Guide to Zilliqa
Sharding serves to offer some promising solutions to the elephant in the room of blockchain platforms right now, scalability. While Bitcoin’s lightning network is in the testing phase and has been showing some very promising progress so far, Ethereum’s solution brings with it some unique challenges as it is pegged as a world computer that is Turing complete.
Sharding will directly work only at the protocol level, so to the end user or dapp developer it may not be necessarily relevant to learn about. Regardless, Ethereum’s attempt at state sharding for a vast, decentralized network is an impressive endeavor and will be an enormous feat of accomplishment if successfully implemented.