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Article source: A blockchain book

"Will Ethereum cool down?" More than one investor asked.

In a bull market, reactive power is excessive. No one expected that this bull market, which began in early May, would eventually become a solo carnival for Bitcoin. Public chains such as Ethereum almost missed the feast.

In addition to the currency price, Ethereum is also facing an unprecedented crisis. In the face of endless new competitors, Ethereum's performance has already lagged behind. And its expansion plan is still far away.

In the attention of the outside world, V God even proposed to use BCH to achieve short-term expansion of Ethereum. This kind of expediency is interpreted as' relying on others'.

Where will the embattled Ethereum go in the future?

01Weak currency prices

Ethereum, which has taken the second place in the market value of the currency circle, is now facing an unprecedented market crisis.

How bad is the currency price trend of Ethereum? A set of data is visible.

On June 27, 2019, Ethereum reported a price of 366 US dollars, reaching a recent high. This price has increased by 352% from its previous historical low (December 2018, $81), and is 25.7% of its previous historical high (January 2018, $1422). Since then, the price of Ethereum has begun to adjust, with the lowest price at $192, 44% lower than the high on June 27.

According to the same statistical rules, on June 27th of this year, the price of Bitcoin reached a recent high of $13968. This price is 341% higher than the previous historical low (December 2018, $3165), and is 70.3% of the previous historical high (December 2017, $19875). Afterwards, the price of Bitcoin began to decline, with a minimum price of $9056, a 35.2% drop from its high on June 27th.

It is easy to see that compared with Bitcoin, Ethereum has a very limited degree of "recovering lost ground". In addition, after reaching a recent high, Ethereum also experienced a more severe correction, and the price was even close to halving.

Many Ethereum investors are deeply disappointed. When BTC rises, ETH stays put; when BTC falls, ETH falls in response. "Someone joked.

In the eyes of some Ethereum believers, the rise of Bitcoin has even become one of the reasons for the low price of Ethereum coins.

Speculation is not unfounded. Recently, multiple investors have told a blockchain that in the face of ETH's decline, they have sold ETH and turned to investing in more stable currencies such as Bitcoin.

In fact, the mid 2019 bull market has become a carnival for Bitcoin and its forked currency. BTC led the rise, followed closely by forked currencies such as BCH and BSV. Afterwards, multiple platform currencies also rose in response. However, the performance of public chain currencies represented by ETH in this bull market is not impressive.

In addition to ETH, the top three public chain projects in terms of market value, EOS, TRX, and ADA, have recently reached high prices that are only 37%, 18.2%, and 8.7% of their historical highs, respectively. This achievement has fallen behind other mainstream currencies in the recent currency market.

ETHWeak currency pricesWeiqi

In his opinion, as Top2 of the currency circle market value, Bitcoin relies on the Scarcity brought by never issuing more, and some people regard it as a value storage tool; The cake drawn by Ethereum is an unprecedented blockchain ecology - "global computer".

Unlike Bitcoin, Ethereum does not have a total amount of issuance, and it issues more each year. The positioning of its tokens is to serve as a "fuel" for mining incentives and DApp operations. "Even if Satoshi Nakamoto disappears, Bitcoin will continue to grow. Ethereum needs God V to constantly boost investor confidence." ZhangWeiqiRepresent.

As the first generation public chain platform, Ethereum is the initiator of the concept of smart contract and DApp. The coin price of Ethereum is also closely related to its ecology. However, the recent technological progress and ecological construction of Ethereum have few highlights. The average performance of its currency is also expected.

02Crisis Manifestation

The weak currency price has fully exposed the crisis faced by Ethereum to the outside world.

The first crisis comes from Ethereum itself.

Today's Ethereum has completed the last hard bifurcation into the "quiet" stage - "Constantinople". According to the plan, Ethereum in the "quiet" stage is about to turn to comprehensive PoS. In the current transition period, how to balance the interests of all parties and improve the performance of the platform has become a problem for the Ethereum team.

On the 13th of this month, V God released a tentative article - BCH: Ethereum's Short term Data Availability Layer? At Etherear.ch, a forum of Ethereum. In the article, V Shen pointed out that BCH has a large block design, low fees and friendly community environment, which can become the "short-term data availability layer" of Ethereum.

The so-called "short-term data availability layer" means that before Ethereum achieves its long-term goal of 10M/s, it first uses the large block capacity of BCH to store some data of the Ethereum platform. In the future, Ethereum will still rely on its own power to achieve data autonomy.

Previously, V God had supported BCH (ABC) in the forked battle between BCH (ABC) and BSV, and the BCH community should not spare this favor. However, this proposition of God V was still criticized by some members of the Ethereum community.

Ethereum user experience designer avsa bluntly pointed out that the idea of God V is more like an "untimely April Fools'Day joke". In many overseas communities, there are also countless investors roast that Ethereum, as the earliest and most mainstream public chain platform, has fallen into the situation of "relying on others".

Anxiety about performance exposes the second crisis of Ethereum - emerging public chains, which are gradually squeezing Ethereum's Lebensraum.

DAppReview data shows that compared with the emerging EOS, Wave Field and other public chains, Ethereum has been crushed in terms of the number of active users and transactions, and the transaction volume is not dominant. The only thing that can maintain Ethereum's market position is the number of DApps accumulated over the years.

Comparison of ETH, EOS, TRON active users, number of transactions, transaction volume, and number of DApps (data source: DAppReview)

In fact, as early as 2018, EOS and Wave Field surpassed Ethereum in the number of users and transactions. Their performance advantages are also more obvious. The feature of second level confirmation has made these public chain platforms popular among many C-end DApps, especially gaming DApps. These new public chains, which are rising strongly, have had an impact on the ecology of Ethereum.

In addition, the third crisis faced by Ethereum comes from the decline of the entire public chain industry.

EOSTPSDAppBATDAppRepresent.

In the eyes of many blockchain practitioners, after years of development, DApp has yet to produce phenomenal C-end products or B-end applications that are capable of changing the industry. Therefore, many people are no longer optimistic about the DApp ecosystem, but believe that the hope of the public chain lies in the emerging DeFi (decentralized finance) industry.

DeFiDAppDeFiTokenFundRepresent.

"In the current blockchain industry, compared with traditional businesses such as platform currency, Stablecoin and even mining, the public chain is too sexy," he said.

03What is the future

Where will Ethereum go in the future when the currency price is bleak, beliefs collapse, and competing products rise?

According to the established route of Ethereum, it will fully turn to the PoS mechanism in 2020, and introduce sharding, Zero-knowledge proof or side chain expansion protocols to achieve significant improvement in performance and privacy.

But in these fields, various public chain competitors, including EOS, Wave Field, and even IOST, seem to be moving even further ahead. In terms of PoS mechanism, community governance, and Stacking ecology, the aforementioned competitors have already conducted certain explorations.

At the fourth Ethereum Developers Conference (Devcon4) in October 2018, God V claimed that the processing efficiency of Ethereum 2.0 would be 1000 times higher than the existing version.

"This will make Ethereum a real world computer, rather than a smart phone like the one in 1999, which can only barely play with the snake," he said.

"The smart phone of 1999" is the evaluation of V God on the existing Ethereum version. In fact, the current public chain platforms are mostly the same.

Now, TokenFund has long since stopped looking at public chain projects, "Luo Ziang pointed out. The logic is simple: everyone knows that investing in smartphones in 2009 will make them pioneers, while investing in smartphones in 1999 will only make them pioneers

In his view, although digital currencies represented by Bitcoin are still in a period of price rise, the "great prosperity" of blockchain has not yet arrived.

From the bull market in the second half of 2017, it is not difficult to see that the true prosperity of the entire industry is the blooming of a hundred flowers, rather than a single flower. "Luo Ziang said," A quantifiable indicator is that at the peak of the 2017 bull market, Bitcoin accounted for only 32% of the market value of the entire digital currency market. Now, this number is as high as 65%

Changes in Bitcoin's market value share in the entire digital currency market from 2017 to present (source: CoinMarketCap)

From another perspective, the reason for this phenomenon is not that Bitcoin is too outstanding, but that the coin industry has been out of currency for many years, "Luo Ziang pointed out.

Since 2018, the hot spots in the chain circle have emerged one after another. The concepts of DApp, Stablecoin, bifurcated currency, STO, cross chain, DeFi, etc. have appeared successively, but they have not left a typical case that is truly memorable. On the contrary, traditional industries such as mining and exchanges, as well as fraudulent schemes such as drumming, flower spreading, and capital trading, have repeatedly become the focus of heated discussions in the industry.

But the era of public chains has not come to an end, "Luo Ziang emphasized

At the same time, the competition in the public chain industry will shift from gimmicks and operations to more pragmatic architecture and technology. In the long run, this is also a good thing, "said Luo Ziang. More than five years have passed since the first white paper of Ethereum was published. During this period, the fate of Ethereum was full of drama: it changed the industry, caused a sensation, the price reached the peak, then the technology began to stagnate, and gradually went into a decline.

This development trajectory cannot help but make people sigh with regret.

Can Ethereum rise again? No one can provide an answer.

*Some interviewees in the article use pseudonyms.

Statement: This article is the work of the author who has settled on Mars and does not represent the official stance of Mars Finance. Please indicate the source, author, and link of this article for reprinting

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