Ethereum cryptocurrency – growth forecasts

Ethereum cryptocurrency - growth forecasts to keep your hand in

The exchange rate of ether (ETH), the currency of Ethereum, is being followed by many investors in the digital asset market today. The reason? The second cryptocurrency in terms of market capitalization is growing even more rapidly than bitcoin. Some forecasts predict that one day ETH will even surpass the king of digital currencies in the “capitalization” category. But is this realistic? And what factors could make this happen?

  • Ethereum is a platform for creating smart contracts and decentralized applications.
  • Ethereum, according to many analysts, has the potential to surpass bitcoin in terms of capitalization.
  • The reason that the ETH exchange rate is rising is due to the Ethereum technology itself and its rise in popularity.
  • Analysts also often point to Metcalf’s law, which helps in making predictions about the growth of the network.
  • Shortly, Ethereum is expected to undergo additional reform in the form of a new version of the platform, which will improve various elements of its operation.
  • At the end of 2020. ETH cost about $600. Already in mid-January 2021. 1200 dollars, in early February more than 1600 dollars, while in May more than 4000.

Ethereum – the new internet

Let’s start with what Ethereum is. It’s a platform for creating decentralized applications. In other words, with Ethereum you can create all kinds of programs (e.g. cryptocurrency exchanges, platforms for exchanging e-gadgets, or contracts between Internet users), but they do not require the existence of a so-called third party.

What is it about? In the case of “ordinary” platforms between their users stands the administration of the site. An example is Facebook, which is famous for censoring some content or even preventing its promotion. If the portal was based on the Ethereum blockchain technology, this would be impossible.

In other words, Ethereum makes it possible to create an internet with freedom of speech. In addition, other solutions strengthen the property right (e.g. non-exchangeable tokens, which are proof of ownership of rights to e.g. works of art, e-cards, or music pieces).

The aforementioned solutions have been gaining traction and popularity recently, leading to a rise in the ETH exchange rate. However, this is not the end of the story.

Technology pioneers rarely win, and it could be no different in the cryptocurrency market

It is worth noting that rarely in history have pioneering solutions remained market leaders for longer. Today hardly anyone remembers e.g. MySpace, the first social network that gained popularity. Its leadership position was quickly taken away by Facebook.

The same may happen with bitcoin. The most serious candidate for the role of the new blockchain market leader is Ethereum, which was already designed to be a “smarter bitcoin”, with a wider range of possibilities than just fast and anonymous payments.

Ethereum 2.0

The value of Ethereum is most discussed not so much by interested investors in the cryptocurrency market, but by programmers. The latter are increasingly choosing to develop their applications using this very platform.

Ethereum is, by the way, a project that is still being developed. The problem is, for example, scalability. The platform can process a given number of transactions (operations) per second. Currently, it is insufficient for the success that Ethereum is experiencing. The network can process about 15 transactions per second. In comparison, Visa, a global payment network, processes about 1,500 of them.

Fortunately, the platform’s developers are working on a new version of the platform, which is expected to launch next year. It is expected to improve scalability, allowing the project to take off and compete with other mainstream platforms, which could also translate into higher ETH prices.

Metcalf’s law

The release of a new version of the ETH network is not the only element of optimistic forecasts for the project. Many analysts also point to Metcalf’s law.

Metcalf’s law concerns network economics and says that the utility of a telecommunications network or other ICT system increases in proportion to the square of the number of devices (users) connected to it.

Put simply: if there are two phones, there is one connection. If there are already five phones, there can be 10 connections. 12 phones can make 66 connections, and so on.

The law also applies to the growth of the Internet and Facebook. With its help, it has successfully predicted how Mark Zuckerberg’s portal will develop.

Now ETH is being looked at in this way. Some suggest that the project’s growing network will soon make us pay as much as $20,000 for 1 ETH.

– When you look at the size of the ETH network, the number of connections and the trajectory of the price, Metcalf’s law repeats itself in Ethereum. Ethereum is outpacing bitcoin’s movements (…) The more people integrate cryptocurrencies into their lives, the more often cryptocurrencies are accepted, and this growth continues to push cryptocurrencies [upward on the price chart]. (…) If Ethereum truly replicates bitcoin’s moves, ether will reach $20,000, for example, claims analyst D. H. Taylor.

The price of the ETH currency is rising

Let’s look at the market, moreover. At the end of 2020. ETH cost about $600. Already in mid-January 2021. – 1200 dollars, in early February more than 1600 dollars, while in May more than 4000.

Later this year we may be paying as much as $20,000 for ETH. It may not happen that quickly. However, if the project develops as it is now, such a high price is only a matter of time.

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