Natural gas is not gold: even if Ethereum is successful, its price may fall

Buyers based on Ethereum ERC-20 tokens pushed the price of the Ether to more than $1,400 in mid-January, but the situation in Ethereum is not optimistic. The initial token sales boom has ended, and the price of Ethereum has fallen to around $200.

This vicious cycle exposes the inner link between the Ethereum and the ICO boom and bust, and is quite painful for those who bought Ethereum tokens in the past 12 months.

According to Coindesk, but in the spirit of encouraging the encryption community to see failure as learning and growth, this experience is also very helpful in understanding how to form and lose value in the cryptographic assets that come with the blockchain platform.

This dynamic is still being studied. However, a strong hypothesis states that the correlation between the price of a token such as an ether and its actual or expected network utility – that is, its value as a “fuel” in the blockchain ecosystem – may not be very Strong.

Albert Wenger, a partner at Union Square Ventures, suggests that crypto assets and blockchains will revolutionize the current Internet paradigm, and its value can only be captured by application developers who can charge users for services.

Does Ethereum have reservation requirements? What impact does Ethereum have on this?

As Vijay Boyapati said in a provocative tweet, Ethereum’s smart contract functionality depends on people’s use and trading in Ethernet. This is how the ether uses “natural gas” to metaphorize identity. However, Boyapati said that this is in opposition to the notion of measuring the length of time people hold money and the core driver of currency unit prices – “scheduled demand.”

In the short period of the ICO frenzy last year, Boyaparti believed that the Ethereum coin suddenly appeared in the public eye because investors needed to acquire and hold the ERC-20 token of the Ether Store. But now this traffic has stopped. The issuers of tokens that really only want the dollar to fund their operations – rather than the etheric store that develops smart contracts – are now facing threats.

Stellar developer Jeremy Rubin pointed out in TechCrunch’s article that these factors in the Ethereum ecosystem can push the price of Ethereum to zero.

A key point that Jeremy Rubin also proposed is that token issuers trading on Ethereum should build incentive models in which their smart contract networks are not managed through the underlying transactions of the Ethereum. It is managed through incentives in the transaction.

This article is writing on 18 Sept 2018 based on information available online & news portal. If you feel it’s outdated or incorrect, please write here to update it. Mail us: [email protected] Or Whatsapp Us- +13098896258
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