Ethereum: An Altcoin Game Of Hot Potato?

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Ethereum (ETH) continues lead as second biggest blockchain in the rollercoaster crypto space. The #1 altcoin fell to the tidal wave that sank the rest of the crypto market on Tuesday. On Monday, ETH was roaring at a $319.63 high to stumble 20% to a $253.88 low, only 24 hours later.

Cryptocurrency volatility is not unusual. The question is, where will Ethereum stand in the future for blockchain platforms?

Here, turn to the screener platform at Coinwatch.com to comb through the latest crypto market data. Let’s take a closer look.

By Sunday, ETH had taken some recovery steps, rising to $303.04 with a $29.98 billion market cap. Make no mistake, the young visionary behind Ethereum has built an impressive empire- and co-founder Vitalik Buterin is just 24-years-old.

Vitalik Buterin is hailed as the “boy genius” behind the blockchain. The Russian-Canadian programming wunderkind draws what some deem an almost cult following to the ETH table. In fact, the grapevine was buzzing with a rumor that Google (NASDAQ:GOOGL) was trying to cherry-pick Buterin over to the tech empire. Buterin is so popular in the crypto-verse that this became a hot topic last week.

Vice Motherboard’s associate editor Jordan Pearson said Buterin is an “unlikely leader,” and “the reason so many are attracted to the Ethereum project.” Buterin strives to “shift the story to, ‘the protocol will succeed because of myself, plus all of these other people who are capable of moving things forward.'”

Jason Hsu, President Taiwan Parliamentary Colition for Blockchain & Industry Self-Regulatory Organization recently spoke at a Berkeley-hosted blockchain event. The panel asked Ethereum’s leader all about the future of the blockchain world. Notably, Buterin has nicknamed Hsu as the ‘Crypto Congressman.’

Hsu wagers, “…the industry needs a correction of course, as too much money comes too quickly. I feel too much focus is on the price of crypto and not on executions of projects. I’ve got to know Vitalik for over a year and see him as guardian of Ethereum.”

“It’s important to think the force driving cryptocurrency shouldn’t just be money-seeking, but rather we should think how blockchain technology will bring about a fundamental shift in the way our trust system is built,” adds Hsu.

The panel wondered about strides forward on Ethereum’s proof-of-stake project Casper. The status recently had Buterin posting a “tweet storm” its progressing development.

During the storm of tweets, Buterin offered some background in intensive mechanism design research; specifically, “with an eye to making Casper more robust against oligopolies.” Moreover, the ‘wunderkind’ looked into “consensus algorithms inspired by traditional byzantine fault tolerance theory, such as Tendermint.”

Buterin said at the blockchain event: “I think that there has been a lot of frameworks for state channels coming out recently. The Casper protocol is getting much closer to being finalized at this point. It’s just pending review on academic analysis.”

On Twitter, Buterin offered some more color here, calling finality a “very significant advancement. After all, different from confirmations in proof of work system: “once a block is finalized, it is secure regardless of network latency.”

Additionally, reverting the block means that over a third of validators have to “cheat in a way that’s detectable and can be used to destroy their deposits.”

Yet, cryptocurrency is a game of ‘hot potato,’ even for the second biggest blockchain on the crypto block. BitMEX CEO Arthur Hayes recently said in his newsletter ‘Crypto Trader Digest’ that Ethereum is, to put it bluntly, a “sh*t coin.” Hayes’ prediction: the very venture capital firms shelling out investments “at a certain point” will join the bears and ditch ether tokens. They’ll get fed up and “dump everything they can.”

“I don’t know what that tipping point will be, but in hindsight, it will be obvious when the capitulation occurs,” explains Hayes. Sooner or later, Ether will go “from a 3-digit to a 2-digit sh*tcoin.”

That said, 53-year old Canadian entrepreneur Joseph Lubin – co-founder of Swiss-based Ethereum and founder of U.S.-based blockchain tech firm ConsenSys – sees an “unprecedented” story here. Lubin is aware of the “many” that bet against ETH, saying it “could not be done” and “was stupid to do it…the attack service would be so big and fuzzy.”

As far as Lubin is concerned, not only did Ethereum turn out to be a “remarkable success,” this altcoin “is still very immature, still very young.”

Lubin can remember when Buterin first “came up with the description for the Ethereum platforms,” adding: “It was essentially the most elegant, the most powerful description of a blockchain platform up to that point.”

Here’s why the innovator says it worked out “pretty well.” The application layer developer base for Ethereum circles around 40 times bigger presently, as per Gartner’s data.

Lubin said to Bloomberg in an interview that he is unfazed by the dropping prices in the crypto market- even if it makes for investor anxiety. This does not speak to the industry’s potential for growth.

“…we build more fundamental infrastructure, we see a correction, and the potential gets even more impressive… I absolutely expect that there is a strong correlation between the rise in price and the growth of fundamental infrastructure in the ecosystem and the growth of development in the ecosystem. We are probably two orders of magnitude bigger as a developer community than we were eight or 10 months ago,” asserts Labin.

Cryptocurrency is certainly a gamble. That said, when brilliant thought leaders like Buterin and Labin aren’t shaken by the volatility that is a staple of this market, maybe this game of hot potato is worth it.

The crypto market is always on the move- either up or down. We used the screener platform at Coinwatch.com to stay up to date on Ethereum’s real-time data.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.





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