Joseph Lubin, the inventor of Consensus and Ethereum ed, hinted that Ethereum is moving to ultrasonic money. The London hard fork, according to Lubin, is part of a larger global movement that begins with the progress to the democratization of the decentralized financial sector system and the introduction of ultrasonic money. Before we proceed, let us learn a little more about Ethereum.
What exactly is Ethereum?
Ethereum is an open-source, decentralized blockchain that enables users to build smart contracts. Ether is the platform’s native cryptocurrency. In other words, Ethereum is a cryptocurrency technical platform that is largely used to sustain the world’s second-largest cryptocurrency, after Bitcoin, in terms of market value. Ethereum, like other cryptocurrencies, may be used to send and receive money across borders without requiring the intervention of a third party.
Ethereum’s price is expected to reach $5,000 by the middle of 2023 and $10,000 by the middle of 2028, according to the most recent long-term prediction. The price of Ethereum is expected to undergo a significant adjustment, making it an attractive investment choice.
Is Ethereum a good investment?
Although cryptocurrency prices have fallen in recent weeks, this does not always mean that now is a bad time to invest. Downturns may be a great opportunity to buy while prices are low. Given that Ethereum is one of the more costly altcoins, now may be a good time to purchase it while it is “on sale.”
However, just because a cryptocurrency is cheap doesn’t always mean it’s a good investment. Ethereum is a high-risk cryptocurrency that is not appropriate for all investors.
If you’re on the fence about investing, there are two strong reasons to do so right now – and one compelling investors to stay away from it. So, now that we’ve learned enough about Ethereum let’s look at how it’s evolving into ultrasound money.
How is Ethereum becoming ultrasound?
ConsenSys founder Joe Lubin remarked, “We have tremendous demand for the Ether token, with $13 billion worth of Ether locked up in Ethereum 2.0 and $70 billion locked up in decentralized finance.”
To begin, you must first comprehend the meaning of an EIP. The Ethereum Improvement Proposal (EIP) was modeled after bitcoin proposals. Anybody in the Ethereum community can create EIPs for any purpose comparable to a suggestion box. In this case, Vitalik Buterin issued EIP1559 for the first time in 2019.
A new transaction fee structure is also proposed to improve the end-user experience while also serving as a portal to Ethereum’s developing monetary policies. It has become a fight between minor prophets and improving the end-user experience. If you’re honest with yourself, you’ll realize that for Ethereum to become the world’s computer; transaction costs must be as cheap as possible.
Transaction fees are currently set through a first-price auction between the transaction author and the miner who adds the transaction to the blockchain. Because it’s auction-based, it’s easy to understand how costs might quickly spiral out of control if there’s a lot of demand.
Furthermore, EIP 1559 recommends that gas pricing and fees be replaced with a baseline cost that is dynamically distributed to each block based on current network consumption to avoid economic abstinence.
What do Crypto miners say?
Crypto miners are enraged because the base fee is burned instead of being given to the miners for proof of work in this scheme. Small collisions and system gaming are eliminated by burning the base charge, ensuring that miners get substantial transaction fees.
The transaction originator can still add a tip, a little payment called gas premium, to convince the miner to include their transaction or increase the priority of their transaction to be included in a block.
Ethereum’s inflation will be minimized by eliminating its fundamental charge. If Ethereum is reliant on network demand, the positive feedback loop between network demand and Ethereum supply might cause deflation.
The Crypto economics
Both cryptography and economics are optimized in a successful crypto-economic system. The developers of Ethereum have gone through a lengthy research and development process to maximize the efficiency of both its applied cryptography and internal economics. This project is dubbed “Ethereum 2.0.”
Crypto-economic systems are interconnected systems that may be improved alone or together. Engine design is the realm of cryptography, while fuel optimization is the area of economics.
The Ethereum economic engine runs on ETH as its fuel.
Ethereum must be a long-term crypto-economic protocol that can be passed down to future generations. Ethereum must be extremely efficient with the resources at its disposal to achieve this. The overall ETH 2 design work aims to enable Ethereum to develop a maximally safe platform with the least amount of resources required to maximize lifespan and sustainability. As a consequence, the asset ETH has been improved for reliability.
Because gold is the most accessible historical comparison for people to comprehend what is ‘Sound Money,’ Bitcoin is tailored to be the most like gold.
However, Justin Drake believes that the crypto-economic revolution in technology is being used to create something skeuomorphic: new technology attempting to represent old economics.
Because of its real-world uses and capacity to store value, the Ethereum network has more potential to stand firm as ultra-sound money. In a manner, that legacy cryptocurrencies like Bitcoin cannot, Ethereum symbolizes the future of programmable money and smart contracts.Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.