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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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Cryptocurrencies

6 Upcoming Events That Could Trigger a Price Pump for These Cryptocurrencies

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The kind of fundamental developments that sent a coin to the moon in 2017 had already started to lose their potency by the time 2018 came around. As the year wore on, we started to see partnership announcements and technical developments go unnoticed, when once the mere rumour of them was enough to positively impact the price of a coin.

And while 2019 will probably see an extension of this trend, I can’t help but think of the number of times I’ve seen a coin pump 50% in a week, only to go and check the project’s Twitter page and see that they’ve just implemented a new tech update.

By that time I’m too late, and whatever anticipation was being speculated on has turned into news, and is now being sold.

So in the spirit of experimentation, here’s a few upcoming technical updates due in the coming weeks.

Aeternity (AE) – First Mainnet Hardfork

Aeternity has three hardforks scheduled over the next year as it completes its migration from Ethereum. The date for this hardfork is only a few days away, but I include it on the basis of Aeternity’s previous volatility, exemplified in this chart from the last seventy days. Volume has been climbing all through February, from $10 million to $50 million.

Hardfork Date: February 20th

IOST (IOST) – Mainnet Launch

Just over a week away from mainnet, the IOST token price has shown signs of life with 4% growth in the past seven days. A summary of what the IOST mainnet promises to bring can be found here in a tweet from co-founder Jimmy Zhong.

Mainnet Launch Date: February 25th

 

Ethereum (ETH) – Constantinople Hardfork

The previously delayed Constantinople hardfork is scheduled for the end of the month. Block rewards will be reduced from 3 to 2 ETH, and the difficulty bomb will be delayed for another year, among other tweaks.

At time of writing ETH is up 8% for the week, with Constantinople ten days away.

Hardfork Date: February 27th

CyberMiles (CMT) – 15 Million Users’ Data Uploaded to Blockchain

A huge migration is set to take place at the end of February as the 5Miles mobile app uploads all of its customers accounts onto the CMT blockchain. Once launched, 5Miles clients will be able to transact independently across the chain. 5Miles is a ‘mobile marketplace’ where users buy and sell various items and services.

Launch Date: February 28th

Theta Token (THETA) – Mainnet Launch

Theta Token is another project set to leave Ethereum for its own mainnet. A look at THETA’s weekly chart shows a token at just about break even, but zooming out to the monthly view reveals that something has been building with THETA for a while.

Mainnet Launch Date: March 15th

QuarkChain (QKC) – Mainnet 1.0

QuarkChain was one of the darlings of the ICO period, and big things were expected from this highly rated project. Big things might still be on the horizon, and we may find out more about QuarkChain when the mainnet lands at the end of March.

Read more on what’s in store for QKC fans in 2019. The coin price has been falling all quarter, and all month. But that trend reversed for the first time this week as the coin regained 6% of its value. Volume jumped from $1 million to $6.8 million in the last few days.

Mainnet Launch Date: March 31st

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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4.5 stars on average, based on 146 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.




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Analysis

Ethereum Price Analysis: Volume Spike Pushes ETH/USD to Monthly Highs

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Ethereum’s price rallied to one-month highs on Sunday, overcoming a soft landing for the broader cryptocurrency market and reaffirming the view that ETH has already bounced from a major bottom. A look at the fundamental picture, specifically ETH block transactions, suggests Ethereum isn’t out the woods yet with respect to the bear market.

ETH/USD: Toward Monthly Highs

Ether peaked at $139.50 on Sunday, according to Bitfinex. It was last seen trading at $130.78, having gained 4.9%. That marks the highest level since mid-January. As a result of the gain, ether moved into overbought territory based on the hourly Relative Strength Index (RSI).

Outside highly-anticipated Constantinople upgrade, which is scheduled later this month, there was no immediate catalyst for Ethereum’s breakout on Sunday. This suggests that technical trading was dictating market flows. ETH remains well supported above $120; the breakout north of $125 suggests further gains are likely.

Over the past 24 hours, Ethereum’s trade volumes have surged 25% to $3.5 billion, according to CoinMarketCap. Ether is presently on course for its highest 24-hour turnover since Feb. 9.

At current values, the Ethereum network has a total market capitalization of $13.4 billion, placing it second among active blockchains and $1.2 billion higher than the next biggest project, XRP.

Bottom is Well Protected

Since plunging to the mid-$80 range in December, Ethereum has undergone a doubling in price followed by a downward correction that threatened to expose the $100 support. Since the beginning of February, ETH has rallied more than 20% to current levels.

As Hacked recently reported, a tremendous pump was needed to keep Ethereum from further capitulation in December. Between Dec. 10 and Dec. 24, institutions and cryptocurrency whales picked up 11 million units of ETH to prevent further losses. In other words, they absorbed more than $1.5 billion worth of selling pressure at the time.

Between Nov. 19 and Dec. 24, these large players probably accumulated somewhere around 24 million ETH. This should serve as a strong backstop to any further attempt to push prices lower.

Block Transactions Plunge

Although Constantinople is expected to solve many of the technical challenges facing Ethereum, the number of transactions on the network has been in free fall since early 2018. According to data from Etherscan.io, block transactions have plummeted more than 90% over the past 13 months.

As the following chart illustrates, the highest number of transactions ever recorded occurred on Jan. 4, 2018 to the tune of 1,349,890 units. That figure fell to 381,151 units on Feb. 10, 2019.

This figure appears to be positively correlated with the sharp drop in Ethereum’s exchange volume over the same period. Combined with the fierce competition from Tron and EOS in the market for decentralized applications, its apparent that Ethereum could face further pressure in the short term. While this is unlikely to produce new lows, it certainly means that the bear market is here to stay.

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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4.7 stars on average, based on 771 rated postsChief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi




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Analysis

Crypto Update: Another Spike Fails in Crypto-Land

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The major cryptocurrencies continue to follow the pattern which consists of sudden spikes followed by choppy sideways periods. Today, the top coins jumped higher, with the strongest currencies testing their recent swing highs, but the move quickly failed. The market continues to be dominated by low liquidity and the bearish long-term forces, making it difficult to make money trading the long side.

That said, the short-term break-outs, which were formed one week ago, remain intact and our trend model is also on short-term buy signals in the case of the relatively stronger coins. Despite the buy signals, traders should remain cautious with new positions, as the long-term forces continue to work against bulls here.

The leadership of last week’s move continues to be weak and without a new batch of coins hitting new short-term highs, it’s hard to see what could propel the market higher. The top 3 coins haven’t been able to pull their weight either, so odds clearly favor the continuation of the bear market from a broader perspective.

BTC/USD, 4-Hour Chart Analysis

Bitcoin remains stuck below the $3600 level despite today’s spike, and the bearish drift that started last week in the coin continues. BTC’s relative weakness is a negative sign for the whole segment, and although it’s still above the support/resistance zone just north of $3450, the long-term setup continues to point of the $3250 and $300o support levels.

That said, the short-term buy signal is still in place in our trend model, and traders could open small, speculative positions in BTC, with strong resistance zones being ahead near $3850 and between $4000 and $4050.

XRP/USDT, 4-Hour Chart Analysis

Ripple has also been showing relative weakness in recent days, and today it dipped back below the key $0.30 support/resistance level following the failed rally attempt. While the coin once again avoided a move towards the next main level of interest at $0.28, it is still likely to violate that level and test the August low near $0.26.

With that in mind, traders should stay away from XRP, with our trend also being on short- and long-term trend signals, and barring a move above $0.32, the immediate outlook is also negative, with further resistance levels ahead near $0.3550 and $0.3750.

Litecoin Tests $44 Level Again as Ethereum Clings to $120

LTC/USD, 4-Hour Chart Analysis

After settling down near the $41 price level, last week’s star LTC spiked as high as $44 today, but it failed to break-out above the key resistance zone. While the break-out remains intact and the MACD indicator still only points to a correction, the market-wide trends remain negative, and the previously leading coin hasn’t shown signs of relative strength in the last couple of days.

Traders could still hold their positions here even though a swing low is not yet confirmed, but strict rsik management rules should still be applied. A move back below $38 would trigger a downgrade in our trend model, which is still on a short-term buy signal. Above the initial resistance at $44, further levels are ahead near the recent swing high near $46 and at $51, while support below $38 is found near $34.50 and between $30 and $30.50.

ETH/USD, 4-Hour Chart Analysis

Ethereum has been trading in a narrow range today and the recent short-term swing high capped the rally attempt in the second largest coin. While the coin is still holding on to most of its gains from last week, trading well above the $112 level, the lack of bullish follow-through is a negative sign even regarding the short-term outlook.

The hostile long-term setup raises the odds of a failed short-term rally, and although pour trend model remains on a short-term buy signal, traders should only consider small, speculative positions here. The $120 level continues to be at the center of attention, with another strong resistance above that being found near $130, while further support is found in the $95-$100 zone.

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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4.7 stars on average, based on 465 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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