The first wave of cryptocurrencies like Ethereum has already launched. But despite this initial success, the price of Ethereum has been falling since then because of its notoriously high service fees. In addition, new blockchain networks are coming out to compete with Ethereum. These new networks may take away traffic from Ethereum and increase its prices, but the first-mover advantage of Ethereum is a significant asset in the long run.
The first-mover advantage
The Ethereum platform powers many popular decentralized applications. It powers the most mature ecosystem for Decentralized Finance (Dfi), a digital version of traditional financial systems. DeFi applications let people borrow money, trade without an intermediary, and make interest payments without disclosing their identity. This has given Ethereum a significant first-mover advantage, and the network effect has helped it grow by 1,580% in a year.
Long term success
Ethereum’s “first-mover advantage” has positioned it for long-term success, so it may be worth adding to your investment portfolio. Since decentralized finance will be a massive part of the future, Ethereum may be an excellent addition to your portfolio. However, as with all other virtual currencies, you should be aware of the high volatility and risk involved. Investing in these currencies is risky, and there is no guarantee that the price will go up.
Becoming increasingly popular
In addition to being a deflationary asset, ETH is now being adopted by institutional investors. In addition, it is becoming increasingly popular, with institutional adoption, mass utilization, and a robust community assisting in continued development.
Multiplication of the market
In the short term, the Ethereum ecosystem is poised for the industry’s most significant everyday exchange volume and application utilization. The market for ETH has doubled in the past six months and could continue to double in the next few years. With the new ecosystem, DeFi is set to grow beyond crypto trading insiders.
Although the price of ETH is a highly volatile asset, it has already risen more than 300% year on year. This means that investors who bought early have quadrupled their money each year.
The future of Ethereum
Ethereum’s blockchain uses a distributed ledger called the blockchain, which helps users exchange money anonymously. The blockchain network allows users to exchange money with each other without a central bank. This makes Ethereum a decentralized currency that is nearly autonomous.
The decentralized nature of Ethereum makes it an attractive option for businesses, governments, and individuals. The lack of a central bank makes it a highly flexible currency that you can use for various purposes, including financial transactions and investment.
The value estimation
Ethereum’s price is currently expected to rise by just a little this year. The long-term predictions of a panel of analysts are even more bullish. However, it has been estimated that by 2025, the cryptocurrency will reach US$17810 per ETH, almost four times higher than the end of 2021 valuation.
2022 milestone and smart contracts
When Ethereum reaches its 2022 milestone, it will be a decentralized blockchain with smart contracts. ETH 2.0 is the next major upgrade to the Ethereum network. It is designed to increase transactions throughout.
To increase this, Ethereum will split the workload between several parallel blockchains with a common consensus PoS blockchain. Because of this, tampering with any single chain would require the tamper to alter the common consensus. This makes it too costly for any threat actor to attempt. The Beacon Chain is the central hub for Ethereum 2.0.
Final Views
Bitcoin and Ethereum share many similarities, but they have different long-term visions. Bitcoin, for example, was created for its use as the world’s first cryptocurrency, while Ethereum aims to complement Bitcoin in all areas of business and social life. Both use blockchain technology to ensure secure, transparent digital ledgers. Bitcoin and Ethereum have different consensus systems, but both have decentralized applications. In 2022, Ethereum will be a decentralized blockchain with smart contracts.