Ethereum: what was, what is and what probably will be

Continuing the series ‘what was, what is and what probably will be’, our second star is Ethereum. The first question about Ethereum is the classic “cryptocurrency” test: How is Ethereum different from Bitcoin?

Ethereum introduces small computer programs in form of smart contracts or decentralized applications (DApps) executed on all the computers on the network [1]. This purpose is completely different from transactional coins because Ethereum created an infrastructure to build new derivatives as decentralized finances (DEFIs), for example, exchanges, banks, insurances, financiers, and other digital assets.
This episode describes the development of the Ethereum network for the derivatives market. With this move, the cryptocurrency market now competes for a $1Q derivatives total market [2] that recognized the specific importance of the Ethereum decentralized platform for the digital community.

What was Ethereum?

Ethereum protocol was enabled by an open-source software called Go Ethereum written in Go (along with other implementations in C++ and Python). All software repositories are stored on Github [3]. The incredible programmer Vitalik Buterin, who described the white paper [4], Gavin Wood, who implemented Virtual Machine do Ethereum (EVM), and other geniuses were the co-founders of Ethereum.

What is Ethereum?

As described by the Ethereum community itself, “Ethereum is a decentralized platform that runs smart contracts, applications that run exactly as programmed without possibility of downtime, censorship, fraud or third party interference” [5].
But what is behind Go Ethereum software? There are 29,300 ‘stargazers’, people who observe the program, including me, 10,800 forks, copies of the repository, 2,100 watchers, persons monitoring all activity, 186 issues, tasks and bugs to solve, 84 pull requests, the heart of collaboration on GitHub, 599 contributors, programmers from the outside of the project that wants to contribute, 69 members and 9 maintainers. As can be observed, serious projects have great teams. Protect yourself from scams by examining the coin community before investing.

Figure 1. Ethereum community on Github.

What probably will be Ethereum?

Despite the known fact that Ethereum innovation is very important for the cryptocurrency market, Ethereum has suffered from high fees and inflation, while competing networks practice low fees and deflation. Presently, the real growth rate of Ethereum is lower than the Bitcoin growth rate.
In a previous paper [6], a model was developed based on the linear combination to predict the altcoin season (2020–2023) using the market cap of the three most important altcoins and subsequent data treatments with an R statistics platform [7], culminating in an interesting price model called Altcoin Waves. In this way, the Altcoin Waves model was applied to the next Ethereum wave (Figure 2), according to the model the predicted price could reach $6370 after 2020 bitcoin halving, or 3800$ if the market doesn’t improve for it, cosine similarity 92.03%.

Figure 2. Ethereum Waves model (green) and real data (red) projected in 2021.

Conclusion

In summary, the Ethereum net presents serious problems to solve, especially about the high fees and inflation. For example, Binance Smart Chain has fees a hundred times lower and deflation of 10–12 million coins per year, while Ethereum net creates 12 million coins per year. The community needs to solve these issues, or it will lose market share to competing networks. In this context, the community will introduce novities on 04/14/2021. Let’s check.

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Acknowledgments

The author is grateful to Satoshi Nakamoto, Hal Finney, Nick Szabo, Changpeng Zhao, Sabrina Moraes, Fernando Ulrich, André Fauth, Criptomaníacos, and Vela Trader.

References

1. https://bitsonblocks.net/2016/10/02/gentle-introduction-ethereum/

2. All of the World’s Money and Markets in One Visualization — 2020 Edition (visualcapitalist.com)

3. www.github.com

4. Ethereum Whitepaper | ethereum.org

5. https://geth.ethereum.org/

6. https://medium.com/coinmonks/altcoin-waves-a-linear-combination-for-altcoin-season-modeling-7c0b13bcabed

7. https://www.R-project.org/

8. www.quandl.com

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