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Progress Scaling Ethereum

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In the blockchain technology world, scaling debates are pretty much the centre of everything. It is one thing to create a solution that works on a micro-level, but no one knows how things will look once it is expanded to the global level.

Many people spend time talking about the scaling of Bitcoin, but the efforts to scale Ethereum have been far more interesting. Between sharding and the switch to proof-of-stake, there have been countless solutions provided, and Vitalik Buterin seems to think his hard work is about to pay off.

Ethereum’s End Goal

Everyone knows this, but it is important to restate it: Ethereum wants to become a world computer of sorts. The end goal is to build a giant, decentralized network of computers that are both able to record transactions (using blockchain technology) and produce smart contracts (using artificial intelligence technology).

The combination of these features allows for the development of decentralized applications (DApps), which piggyback off the underlying technology and create a market for Ethereum’s token, Ether.

ERC-20 Standard

Tokens classified as ERC-20 are designed and used on the Ethereum platform, and follow a list of standards that allow for a simpler method of sharing, exchanging, and transferring tokens between users.

DApps use the ERC-20 token standard to represent shares in companies, proof of ownership, or coins of a currency. These tokens have essentially become the building block of any DApps that developers seek to develop on Ethereum. It is important not to confuse ERC-20 tokens with Ether, as Ether is what is used to compensate a user for their computing power, whereas the ERC-20 tokens are endemic to the actual DApps.

This high level of simplicity comes with a cost though. Some vulnerabilities have been found that allow attackers to gain access to a large quantity of tokens. Additionally, tokens may be destroyed by accident with the use of some smart contracts. A new standard, ERC-223, is now being developed to solve this problem.

The Best Alternative

Companies like Golem, which saw the release of its token delayed 3 years, are finding there to be some difficulties integrating with Ethereum. Most of these issues stem from current scaling problems, as was evidenced when Cryptokitties (a popular game building on top of Ethereum) created massive congestion within the system.

The technological barriers become more important once you process the fact you are dealing with other people’s money. There can be no room for error, and this is where much of the delays came from. For example, the verification of basic cryptocurrency transactions is fairly simple, but once you are verifying the results of a smart contract, the system begins to fail.

That being said, Golem’s CEO, Julian Zawistowski, still believes that Ethereum is “by far the most promising blockchain platform”. There aren’t many competitors in the space, and it seems like all the current problems will be solved, or on their way to being solved, soon.

Why Scaling Matters

The critical difference between Ethereum and Bitcoin is the fact that Ethereum acts like a company, whereas Bitcoin is a scarce commodity that is generally unmanaged and has no new offerings. As a result, this puts pressure on the Ethereum foundation to continually improve the capabilities of their platform so it is able to handle the required amount of transactions and tokens.

Not every company wants to build a whole new framework for the operation of their own protocol. The same way that WordPress has made it unnecessary for every company to learn how to code their own website on a deep level, Ethereum hopes to do this for all blockchain companies. Its ability to enable the development of DApps makes it a unique player in the space, and the fact that scaling issues are beginning to be solved (as is evidenced by ERC-20 problems being solved and projects like Golem finally being released) is a great sign for its future.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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  1. Jonwestwood

    August 17, 2018 at 10:12 pm

    Where’s the second half of this article? The part about the progress of scaling Ethereum?

  2. andrewmayne1

    August 17, 2018 at 10:14 pm

    Hi William,
    You used the word ‘unique’, curious how you think NEO, EOS etc fit into this landscape.

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Analysis

Crypto Update: Coins Consolidate After Key Breakdown

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The cryptocurrency segment is still under the influence of this week’s key technical breakdown that carried several majors below crucial support levels. Bitcoin’s moves have been dominating the market in recent days, and as the most valuable coin formed a short-term bottom, the top coins entered a choppy consolidation phase, retracing some of their steep losses.

Ripple and Stellar continue to outperform the broader market from a technical perspective, and some other coins, like Ethereum and Monero are also holding up above their previous bear market lows, but the overall picture is still overwhelmingly bearish in the market. The total value of the coins is slightly above the $180 billion mark, but further losses are likely in the coming weeks, with all of the majors being well below the breakdown levels, confirming the move.                

BTC/USDT, 4-Hour Chart Analysis

Bitcoin found support near the $5350 price level even though it spiked as low as $5200 during the rout, while the bounce carried the coin up to $5650. The breakdown is clearly intact in BTC and our trend model remains on sell signals an all time-frames, with a test of the $5000-$5100 zone still being likely in the coming period.

Bitcoin faces strong resistance in the long-term zone near $5850, with further key levels at $6000, $6275, and traders and investors shouldn’t open new positions here, with the long-term downtrend clearly being intact.

XRP/USDT, 4-Hour Chart Analysis

Ripple overtook Ethereum in terms of market capitalization again, thanks to its relative strength this week, and the coin is still clearly holding up above the long-term support zone between $0.42 and $0.46.

That said, our trend model is still on a short-term sell signal, and given the bearish segment-wide trends traders shouldn’t enter new positions here, even as the coin will likely be among the leaders of the future rally attempts. Further support levels are found near $0.375 and $0.355, while resistance is still ahead at $0.51, $0.54, and $0.57.

Ethereum Holding Its Ground above Bear Market Low

ETH/USD, 4-Hour Chart Analysis

While Ethereum failed to recapture the $180 resistance level during the bounce, it also avoided a sustained move below the previous bear market low near $170, despite the spikes towards the $160 support. Ethereum short-term stability is a slightly positive sign, but without further signs of strength, the coin remains in a clearly bearish technical setup. With that in mind, traders and investors should still stay away from the coin, as odds still favor the continuation of the broader downtrend.

LTC/USD, 4-Hour Chart Analysis

Litecoin continues to trade below the $44 support/resistance level after the clear break to new bar market lows, and it remains one of the weakest major from a technical perspective. A move towards the next major support zone near $38 is likely in the coming weeks, even if a bounce up to the $47 level is in the cards. Litecoin is on sell signals on both time-frames in our trend model as well, with further strong resistance levels ahead at $51 and $56.

EOS/USD, 4-Hour Chart Analysis

EOS is hovering around the key support zone near $4.50 since a spike towards the bear market low near $4.30 during the steep selloff. The weak bounce didn’t change the technical setup, and the coin is still likely to fall below the previous low, as the declining long-term trend is clearly intact. Our trend model is on sell short-, and long-term trend signals, with strong resistance levels ahead at $5 and $5.35.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Ethereum

Amid the Crypto Selloff, Ethereum and XRP Battle for Second Spot

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A flash crash in the cryptocurrency market on Wednesday saw bitcoin’s total value fall below $100 billion for the first time since October 2017. It also left major altcoins Ethereum and XRP battling for second spot in the market cap rankings after the latter managed to hold up slightly better than its peers.

Battle for Second Spot Intensifies

As has been the case for the last few months, Ethereum is no longer the clear-cut no. 2 cryptocurrency on the basis of overall market cap. Over the last 24 hours, ether has fallen 13.5% to $170, where it was threatening yearly lows.

XRP, meanwhile, has fallen 10.5% over the same span to reach $0.4363.

Earlier today XRP posted a total market capof $18.14 billion, slightly higher than ether’s $18.09 billion, according to CoinMarketCap. This so-called “flippening” was first observed back in September after XRP posted a sudden and dramatic surge on the back of fundamental news and expectations of wider institutional adoption.

Interestingly, at the time of the last flippening, Ethereum’s price was trading comfortably above $220. Earlier in September, ether had experienced multiple large selloffs over concerns that the smart-contract protocol was losing relevance.

A cooling ICO market has also diminished demand for ether in the wider market. The amount raised via initial coin offerings plummeted to a mere $63.2 million in October, the lowest since March 2017 just before the token boom began, according to ICOData.io.

Crypto Downturn Accelerates as Bitcoin Cash Hard Fork Looms

Steep losses in ether and XRP reflect a much wider downturn that is showing little sign of dissipating. The combined crypto market cap fell below $180 billion on Thursday for the first time since October 2017, as traders rushed to liquidate their positions on virtual exchanges. Trade volumes on these platforms reached a high near $25 billion on Thursday.

The sharp selloff can be partially attributed to uncertainty over the upcoming bitcoin cash hard fork, which has the potential to split the BCH community in half. The hard fork process is expected to begin at 16:40 UTC. Craig Steven Wright, the self-styled Satoshi Nakomoto and main backer of bitcoin SV, has threatened to sabotage the chain “if/when DSV… hits the ABC fork”.

Wright has also threatened to tank the bitcoin price should existing miners switch to BCH. In a Wednesday tweet directed at bitcoin miners, Wright said the following:

“If you switch to mine BCH, we may need to fund this with BTC, if we do, we sell for USD and, well… we think BTC market has no room… it tanks.
Think about it. We will sell A Lot!

Consider that….

And, have a nice day

(BTC to 1000 does not phase me)”

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 665 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Analysis

Long-Term Cryptocurrency Analysis: Bear Market Continues With Major Technical Breakdown

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After months of choppy consolidation, yesterday, we saw the largest move in the cryptocurrency segment since April, which took the majors below key technical levels. Bitcoin’s drop is the most important event, since the most valuable coin violated a structurally important base support for the first time since its historic bull run to $20,000 started.

As we warned repeatedly, the market didn’t show signs of healing during the sideways drift, since no leadership developed, and the coins failed to show follow-through following the, sometimes explosive rally attempts, so our trend model remained overwhelmingly bearish throughout the consolidation.

The top altcoins completed their structural breakdowns well ahead of BTC, and the stability of Bitcoin was the most encouraging sign for crypto-bulls, so now, the broad selloff confirmed the next lower in the bear market.

BTC/USD, Daily Chart Analysis

After violating the primary support at $6275, Bitcoin’s selloff accelerated below the weaker $6000 level and the key zone near $5850 wasn’t enough to support the coin. The structural breakdown will likely lead to a test of the $5000-$5100 zone, while an unlikely recovery would be a very positive development. Primary resistance is now ahead near $5850, while further major support zones are found near $4500 and $3600, and traders and investors still shouldn’t enter new positions here.

ETH/USD, Daily Chart Analysis

Ethereum fell to a marginal new bear market low, outperforming Bitcoin from a short-term technical perspective, but that’s not enough to warrant optimism with regards to the long-term setup. ETH is still in a clear long-term downtrend despite the lengthy consolidation phase, and a test of the $160 level is likely in the coming period.

The coin is still on sell signals on both time-frames in our trend model, and traders and investors should stay away from new positions, with further support found near $130 and with resistance levels ahead near $200 and $235.

(more…)

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 396 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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