Opinion: The state of Ethereum



In my last couple of articles I focused on Bitcoin and its basic technology, the blockchain. I discussed the lightning network, because I see Bitcoin as the King of Kings and, of course, why so many people exchange blockchains for DLTs.

It is time to bring these articles a step forward and examine different technologies and

Also, for a while I will completely ignore the price, since I am not a professional trader (nor a investor), and I know that technology and price rarely come hand in hand. [19659003] In addition, I will assume that many of you have lost during the last couple of months, so I will give you my rather positive outlook for the medium term and why this technology is unstoppable; in the sense that, if you cancel your cryptography, you will eventually see profits.

Unless you have mistakenly invested in totally disgusting ICOs.

If so, act like a real ship captain: accept the result and go down with it. It is useless to sell a depreciated asset of + 90%. If you do not agree, repeat after me:

  1. I will not invest what I can not afford to lose,
  2. I will buy below and sell high

I tend to see the cycles of the market as mini- bubbles, constantly grow and then explode, which gives me enough confidence to understand the reality of things is quite generous: if you follow the previous rules, regardless of when you have invested, there is a 'high probability that you can still profit from your bags. Wait a little longer. Some expert crypto-dealers agree that there may be a rally during October, which could potentially last until the end of the year. Will this be the case? The history of prices is not repeated, but we can certainly draw valuable lessons

Now, for the good part.

What cryptocurrency projects do I like?

As I have already pointed out, some of the main concerns of people involved in encryption and investment seem to be scalability and user adoption. Of course, since the two problems remind us of the problem of the egg and the hen, we could object: o some important cryptocurrencies like the Bitcoin or Ethereum scales due to a technological change, such as Lightning Network, PoS and sharding, or The other way and people adopt cryptocurrencies due to a number of different reasons, such as the effective need to use a decentralized digital currency, peer-to-peer – think of Venezuela, Argentina, soon to Brazil? – or the fact that people like to speculate on highly unregulated markets (since it allows anyone to do great manipulations and only bet money).

In line with these problems, I will discuss two projects that show great potential to promote different ways of scaling: Ethereum and Stellar .

Both remain my 2 best choices for the moment.

-this article is non-financial advice as it represents only my personal opinion and opinions . I have some savings invested in cryptocurrency, so take everything I write with a pinch of salt. Do not invest what you can not afford to lose and always read as much as possible on a project before investing. Never forget: with great power come great responsibilities. Being your bank means you are always responsible for your money. No hesitation, no resignation


The first true bitcoin competitor, as many of you love to put it.

The ICO playground. The magical land of the tokenisation of resources, where everything is possible.

I remember that at one point people were talking about stiffening, when Ethereum would overtake Bitcoin's market valuation.

(and then you want me to think that we behave rationally? Good God)

Ethereum was the project that really guided my curiosity about cryptocurrencies. The first document that I actually digested was from Ethereum; and, oh boy, I liked it!

The concept of tokenizing, practically anything, blew my weak brain with ideas. And I was not alone, because the more I felt down to the rabbit, the more projects I would have found taking advantage of a new way of creating value.

If you've been here long enough, you've heard about a million guru masters who say something like:

The Ethereum Ecosystem

Although I like to think it would be wonderful to have a decentralized world where all materials, products and things in general could be recorded in a blockchain, I wonder "how much would it really be useful?"

I do not doubt that there are projects in ethereum like Modum or Wabi, which aim to really make a significant impact on how the management and distribution of supply chains operate (in terms of transparency, that is). It works? How far did they get? Is there a real need for these types of applications?

There are several conflicting opinions on the subject, but the truth is that success depends very much on adoption; and adoption depends on speculation or premiums.

A quick visit to the WaBi website, for example, shows a company that records dairy products on an immutable and transparent ledger, so that citizens in China can feel confident in buying milk for their children. This is actually a huge deal.

But, what about the user's prizes? Loyalty points, insurance schemes and other partnerships do not seem the right way to go, according to some opinions. You could also ask if a blockchain is needed for that kind of prize distribution. Does this company really need a token in their ecosystem?

If we want to live in a non-authoritarian system, then I do not see a single currency, but a plurality of cryptocurrencies, which behave differently according to the proposed intentions. It is possible to have assets, some behave like securities (paying dividends and so on), others give their users the power to vote within a given community, or even to allow people to record information (acts property? game objects?) representing a physical or virtual resource. Whatever the final result you want to achieve if you can do it through decentralization, giving an appropriate incentive to your user base, is not that what matters?

It is a win-win scenario. The more companies compete to provide better incentives, the easier it is. There are more twists and turns around the correct application of prizes and their maximum effectiveness, however, the basic hypothesis of decentralization and community-led collaboration is in the hypothesis that the more you give, the more you receive: it has been discovered, apparently, we are not single-minded beings who simply focus on our well-being and maximize our utility; at least not one hundred percent of the time. Nor do we base our decision-making on rational thoughts.

If using some application (such as sharing resources) I can now easily receive rewards, loyalty points in the form of tokens, and I can also exchange those assets one with the other who has to dictate what the true value is of anything?

To answer the question about the real value (and utility) of Ethereum, as a means of creating and exchanging value, we must first understand the objective of its currency.

The Purpose of Ether

Recently, an article was born around the utility of Ether. The essence of the whole thing was that the Ethereum network should allow for the acceptance of different tokens to pay for the gas, which would undermine the need for a native currency.

I admit it, in the beginning I saw it as an absurdity. Why would anyone want to accept the erc20 tokens? I'm just a mask on top of the ether, using its main features. In my mind I've always seen Ethereum as a structure, or tool kit, that allows developers to create products on a decentralized network. Of course, we are still at the beginning and, due to the "lack" of perceived progress, people tend to come out with decisive arguments about the value of things. I remember the exact same argument when the bitcoin colored update was under discussion.

However, the criticism of the author is not valid? What is the value of Ether, if it is not necessary to pay taxes with the currency nominated by the network?


If we all decide not to use Ether and instead an ERC20 / 223 / etc token, while at the same time miners also accept those tokens as payment to include a certain transaction in a block, so there is no purpose for Ether (except if people still want to use it).

As Vitalik says: [19659003] In Ethereum as it currently exists, this is absolutely true, and indeed, if Ethereum does not change, all parts of the subject of the author (except the part on the evidence game, which would not apply to Ethereum as it is today) would be correct.

The current value of Ether is to protect the network. In the long run, when Casper, sharders and atomic swaps are all right, then I see no reason why people are being subjugated using Ether to pay for gas charges. Let them use any cryptocurrency they want.

Ether's purpose is to pay block makers to help us reach consensus. So even if we allow users to pay tax with tokens, miners will receive block premiums at age. They will have to sell to convert to btc, usd, etc. If there are no buyers, then what happens at the price?

Go down into the sink. And no miner / stator (when the PoS arrives) wants to keep a well devalued asset. We should therefore allow more minors to create blocks token.

This idea seems too annoying, to be honest. Why waste time complicating everything? If there are pressures from both user and miners communities to allow for the payment of other tokens as gas, then the development team should probably pay attention to the call. Even if my instinct tells me that the probability that this proposal had an ambiguous intent would be great, indeed.

Until then, why bother?

In the end, what do you do with that kind of information? I mean, if that happens to Ether because people prefer to use tokens, so be it.

Is not this the purpose of decentralization? To allow people to choose?

At the same time, I would say that there are few users who really care about tokens or anywhere.

Decentralized App State Of The Art

A mandatory metric for success, as we saw above, is the adoption by users.

This is not the case with the Dapps, at least during the writing period.

Enough to look at, a website focused on viewing statistics on decentralization applications, we clearly see that there is still a lot of adoption.

The meaning, even if I absolutely agree with the author's concern, seems a little too early to jump to conclusions of some sort.

Some take-aways from an amazing data scientist are:

  1. We are orders of magnitudes far from the consumer adoption of DApps. No killer apps (outside tokens and trading) have been created yet. Any seemingly "big" DAP (eg IDEX, CryptoKitties, etc.) has low overall usage.
  2. All the major DApps are still very much tied to speculation on value. Decentralized exchanges, casino games, pyramid schemes and even current collector games (I would say) are all around speculation.
  3. What applications (in addition to value transfer and speculation) really benefit from the true unique properties of a blockchain (resistance to censorship, immutability of data, etc.) and unlocking real adoption?
  4. For new protocol developers, instead of trying to convince existing DApp developers to build on the new platform, seriously think about which DApps really make sense about your protocol and how to help them get a real chance of adoption.
  5. As an ecosystem we need to build better tools and infrastructure for a wider adoption of DApp. Metamask is a fantastic tool, but it is still a difficult step to follow for most normal users. Toshi, Status and Cipher are all steps in the right direction and I really do not see the need to create other tools to simplify the user onboarding experience and improve the general UI / UX for normal users.

Even my The project website, Bityond, receives more visits a day than some of these things. Why are we so hasty about making judgments?

I would think that if users were rewarded their incentive would be to participate in as many networks as possible. Thus, cryptographic projects may not necessarily be competing for users ; There is a lot of space for Ethereum, EOS, IOTA, NEO and others to grow without trying to crash on the competition.

There should be little room for maximalism of any kind, for it defeats the purpose of innovation.

Be elegant, ladies and gentlemen. We are all on the same boat, whether you like it or not. Do not bash the projects of others. This adds little value to the community.

The future of Ethereum?

I know that price action is the main obstacle by adoption; but the underlying Ethereum values ​​and the constant development of its EVM keep me somewhat optimistic about this protocol.

Here is how the cycles behave. When the smart-money returns again and the rest of the herd follows, we will see the projects releasing better updates and more positive news coming. We try to be patient and wait for the bearish cycle to end.

Projects that do not have a purpose will most likely go away and investors will learn two important lessons:

A) companies take time to build and,

B) You are likely to make bad choices in the course of your life.

If you still need to convince on the seriousness of this protocol and you happen to be a great lover of data from a look at this tool issued by our dear friend google, which allows you to perform large volume queries on the ethereum registry. It is absolutely fantastic. The way it works is very simple, as explained previously by CCN:

The purpose of making the data of the Ethereum blockchain accessible on Google Cloud is to make easily accessible all the data stored on the blockchain. Although the Ethereum software contains function APIs that can be accessed randomly, such as checking wallet balances, API endpoints are not easily accessible for all data stored on the blockchain. While API endpoints do not enable the display of blockchain data in aggregate, BigQuery & # 39; s OLAP capabilities allow such analysis. The blog showed a chart showing ether transfers and transaction costs from the start of the year, aggregated by day. This visualization supports activities such as priority to changes in the architecture of Ethereum, should an update be necessary.

Bonus: Stellar

I had to put Stellar in the mix, because I really like how it works. Not only because I played with the stellar labs and the documentation was incredibly detailed, but also because I think it is a serious competitor to Ethereum and Bitcoin – although it is more centralized from a governance point of view.

Not that stellar replaces any as clearly it is not, but can be used as an alternative by institutions and societies to access the power of blockchain and trade between them; at least for now.

The way stellar blockchain works is that it reaches consensus through a slightly different mechanics from the job test – called the Stellar Consensus Protocol. It is simply based on the Federated Byzantine agreement that leads to open membership and decentralized control over Byzantine agreement = Anyone can join and vote for federated nodes.

The FBA determines quorums, or groups of nodes sufficient to reach an agreement, in a distributed way. Each node decides on which others to trust. Different nodes must not rely on the same combination of trusted participants to reach consensus.

In FBA, each participant knows others he considers important. Wait for most of those other agreements on any transaction before considering the transaction resolved. In turn, those major participants do not accept the transaction until the participants who consider important are not in agreement, and so on. In the end, a sufficient amount of network accepts a transaction that becomes impossible for an attacker to roll back. Only then all the participants consider the transaction solved. The consent of FBA can guarantee the integrity of a financial network. Its decentralized control can stimulate organic growth. "

The parties that have nodes must be identifiable, not users, and you have chosen which line of confidence you want to enable.It is not decentralized as you would hope, but again we can not have everything. the opening and transparency of Stellar to the NEOs – especially because the next is not resistant to censorship.

E Lumens?

Because Stellar is a blockchain needs a cryptocurrency; the Lumens (xlm), allows users to write transactions on the Stellar blockchain.These transactions also work as smart-contracts, in a sense you can create crowdfund trust lines a new resource (token) or release company shares, create bonds or any other type of financial instrument.

Stellar, as mentioned above, is not at all similar to Ethereum, or even bitcoin for that matter, a former fork of Ripple with a well-optimized consent protocol and a number of large companies that support it.

An excellent example of the Stellar case is the partnership with Veridium Labs, to sell off carbon tokens on the stellar blockchain. Every company has a role here with Veridium that sets the structure and determines the value formula. Stellar serves as a digital ledger for transactions and IBM will manage the key points of the business of buying, selling and managing tokens.

I hope you enjoyed this little piece on two of my favorite projects.

Share your opinion and your thoughts below.

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