As frightening as the above title may sound, the ETH price might go to zero. This is according to several observations by crypto enthusiasts about the technical difficulties the platform is having in scaling. Global Coin Report recently published a piece on how the Stellar network is more advanced than that of Ethereum. In the piece, Stellar was discussed as having a higher throughput that Ethereum as well as being more secure.
It is also with a similar observation that Jeremy Rubin – a technical adviser to Stellar, a Bitcoin Core contributor, investor, and adviser to crypto startups and a freelance consult for cryptocurrency tech – had this to say about Ethereum in a recent TechCrunch post:
“Here’s a prediction. ETH — the asset, not the Ethereum Network itself — will go to zero. Those who already think that ETH will not see real adoption — thanks to a failure to scale, to adopt more secure contract authoring practices, or to out-compete its competitors — don’t need to be convinced that a price collapse would follow as a consequence.”
Life on the Ethereum Network without ETH
He would go on to postulate that the ETH price will go to zero as a consequence of the Ethereum network thriving. The network might reach a point where it will not need ETH to pay for transaction fees on the network.
“But, if one believes that Ethereum will succeed beyond anyone’s wildest dreams as a platform then the proposition that ETH (as a currency) will go to zero will take a bit more convincing running a substantial share of the world’s commerce securely.”
At first, it sounds a bit confusing given the fact that ‘Gas’ in the Ethereum network is paid in ETH. With a thriving Ethereum network, the ETH price will surely go up using traditional laws of economics such as supply and demand.
ETH price not in the Value Proposition of ethereum.org
Jeremy Rubin points out that the digital asset of ETH has been left out of the value proposition given by ethereum.org. The omission of ETH as an asset in the value proposition is grounds to state that it can be replaced in the Ethereum network, thus leaving room for a scenario where its value will automatically fall to zero.
How Will All This Happen?
Firstly, the fees paid to process transactions on the Ethereum network are simply known as ‘Gas’. The latter is a metaphor similar to the fuel used in gasoline-powered vehicles. This fuel can be changed through a slight modification of the engine or changing it completely like how Elon Musk is doing it with electric vehicles. Therefore, with no hard requirement for ‘gas’ to be in ETH, the digital asset can be replaced with another.
The paying for ‘gas’ in a non-ETH asset is sometimes referred to as economic abstraction in the Ethereum community. Miners can be incentivized to mine transactions with another digital asset as a reward.
But the economic abstraction of ETH meets a few challenges such as developing appropriate software to support such a change. There is also getting the approval of the Ethereum community to orchestrate such a hostile takeover of their favorite digital asset.
In conclusion, and according to Jeremy Rubin, there is a hypothetical situation where the ETH price drops to zero if applications on the Ethereum network can run without the digital asset as ‘gas’ for transactions. This situation is a 180-degree turn from the usual thought that the value of ETH will drop due to congestion issues on the network. In the case of the latter, the Ethereum core developers will probably have a solution in the future to solve the scalability issues.
For the latest cryptocurrency news, join our Telegram!
Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.
Image courtesy of Pexels
The post Could ETH Price Drop To Zero? appeared first on Global Coin Report.
Read more at https://globalcoinreport.com/eth-price-drop-zero/
Globalcoinreport.com/ is author of this content, TheBitcoinNews.com is is not responsible for the content of external sites.
Our Social Networks: Facebook Instagram Pinterest Reddit Telegram Twitter Youtube
