Ethereum

Ethereum price prediction: investing in Ethereum (ETH)

Ethereum price chart prediction: is it an opportunity or a waste of time?


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Ethereum price prediction: investing in Ethereum (ETH) (c): © rcfotostock - Fotolia.com

07.12.2017

If you are looking for a guide on Ethereum's ability to cope with future trends and how profitable trading with cryptocurrency might be in coming months, you do not need to look further! We have compiled a comprehensive analysis of the past, present, and future of the ETH, bringing you fresh knowledge from the market as well as the verdict on whether should you invest your money it or not.





Past few weeks were a hectic period for the cryptocurrency, what with bitcoin’s crazy value growth spurt from nearly $2.500 to now $7.000 in mere two months. Those that had money on their hands and had an inkling of what was going to happen are now satisfyingly rolling their sleeves and making a large profit from selling the coins.

 

Ethereum Predict Price © "Hulacoins.com"

 

Now, the big million dollar question remains about the second biggest cryptocurrency in the market, Ethereum; what will happen in the future to the coin and how smart it would be to invest in it? We have conducted a thorough research to find the answer to that particular question, analyzing the past to understanding the present and predict the future of Ethereum.


The History of Ethereum

It all started in a white paper submitted by Vitalik Buterin in 2013, who was a member of bitcoin’s development team. The proposal was first aimed at scripted applications for bitcoin since he argued that decentralized nature of the cryptocurrency offered a chance to further develop bitcoin.

 

Coinbase buy Ethereum © "coinbase.com Screenshot"

Best place to buy Ethereum: Where and how to buy Ethereum (Ether - ETH)?

But where and how can Ethereum be purchased? In our guide we present the best ways to buy Ether. Read it!: Best place to buy Ether.

 

Suffice to say, the idea was rejected from the start, pushing the developer to come up with a new idea – a new platform names Ethereum, designed with a more general scripting language. Ethereum Switzerland GmbH picked up the project and developed the software for the Ethereum, funded by the online public crowdsale in mid-2014.

Ethereum / Ether / ETH © "© Wit - Fotolia.com"

The results were staggering $14 million raised, expressed in over 60 million of ether distributed amongst the investors, while 12 million were left to the development group. The success of the project provided the development team with a green light to build Ethereum protocol, providing 5 ETH for every block mined.

 

An Invest in Ethereum is an Invest in Internet-of-the-Things and Smart Contracts

 

The investment in Ethereum is an investment in the Internet of Things and Smart Contracts. In the future, digital currencies will occupy a large area of ​​business, which will also grow Ethereum and strengthen its position. The specificity of Ethereum is not only based on the idea of ​​digital money, but Ethereum is much more. Although Ethereum is based on Blockchain technology, as is the case with most cryptocurrencies, including Bitcoin, Ethereum uses the Blockchain for more than just money transactions, but also provides a platform for Dapps (Distributed Apps), which consist of Smart Contracts. With Ethereum, machines can use automated contracts to handle transactions automatically. E.g.: A coffee maker not only automatically orders the coffee, but pays it immediately with Ethereum; a car parks itself in a parking garage and pays the parking fee with Ethereum.

 

Technical Development and Breakthroughs

In the aftermath of the presale and mining software development, many questions concerning the security of the platform were raised from the general public, pushing the development team to start series of development updates.

Ethereum has four big Milestones:

 

  • Frontier: Ethereum-Beta
  • Homestead: Ethereum in production with a save network
  • Metropolis: Interface for decentralized Apps (DApps)
  • Serenity: Full switch from Proof-of-Work to Proof-of-Stake

 

Frontier: Ethereum-Beta

The first step towards Ethereum’s development was the launch of Frontier program on July 30th, 2015 where dev team started writing out and scripting smart contracts and decentralized apps for the ETH network. The mining community grew, further securing the blockchain platform while the miners started to earn profits from the sale of the coins. With improved ecosystem, most of the security questions were answered and protocol improved.

Ethereum Frontier © "Ethereum.org"

Homestead: Ethereum in production with a save network

Next in line was Homestead in March 2016. The Ethereum Improvement Proposals represented the changes made in this milestone event. The changes introduced are: eliminating the excess incentive for contracts creation through transactions, introduced simpler value transfers and upgraded the core of the network for future protocols. The changes have thus brought additional security measures to the network, drawing in more investors to the network.

Ethereum Homestead © "Ethereum.org"

Metropolis: Interface for decentralized Apps (DApps)

Metropolis version Byzantium is the current version of the platform while the next stage of the hard fork is to take place at the end of 2017 or beginning of 2018. The implemented improvements concern the anonymous transactions, the predictability of gas charges and increased security of Ethereum wallets.

Arguably, the biggest change that is expected from the new hard fork is the change of system, from proof of work consensus to proof of stake consensus but the said change is yet to be implemented by the next stage called Constantinople. What makes this change significant is the difficulty bomb, as mining operations will face increased difficulty.

Serenity: Full switch from Proof-of-Work to Proof-of-Stake

Lastly, Serenity is planned as next step from PoW to PoS, a push towards more environmentally friendly virtual mining environment, with the date of hard fork yet to be announced.

The Value Tendencies of the Cryptocurrency

The value of ETH through each milestone has steadily risen in recent years, starting from 2014. In the period from 2015 till April 2017, the price was stable, with very little fluctuations in between, ranging in value from $14 to $20. Things started to get really interesting after the Metropolis hard fork, as the ETH value grew tremendously from $20 to almost $400 in September 2017.

Ethereum Price © "https://ethereumprice.org/ Screenshot"

A large number of institutions and traders have joined the frame, especially in the wake of bitcoin’ rising value. It is said, and many would agree, that the bitcoin’s rapid value growth impacts the Ethereum and other altcoins as well; pushing various cryptocurrency markets towards the trend the BTC itself takes.

The market is currently valued at $28.5 billion with close to 100 million coins going around the market at the moment. Although the value did drop in September sharply at one moment, it quickly picked itself up and is floating around the value of $290 for most of the time.

 

Less and less Ethereum will be mined: While in January 2017 were still generated 30,000 ethers per day, the lowest Daily Block Reward of 14,800 ETH was recorded in September 2017!

 

As for the BlockTime period, the time needed has increased due to the mining difficulty level increased, going from 14 seconds at the beginning of 2015 to all-time high 30 seconds in September 2017. The last month did provide great news, as the time needed was lowered back to the original values of 14 seconds in end of October and beginning of November 2017.

Ethereum Blocktime © "Screenshot: https://etherscan.io/chart/blocktime"

With decreased (and increased) BlockTime periods, the number of daily awards is also impacted on a daily basis. The increased difficulty and Block Time, the rewards were fewer and fewer for miners to pick up form 2015 till October 2017, dropping from 38 thousand awarded daily to 15 thousand awarded in October 2017.

Ethereum Ether Supply © "Screenshot: https://etherscan.io/chart/ethersupply Screenshot"

The reason for such development lies in the fact that developers made it on purpose – the switch from hardware mining towards more environmental-friendly cloud mining will render the current mining useless, pushing investors towards the PoS. Yet again, to somewhat placate the market; the rewarded ETH did grow tremendously in November 2017, towards 19 thousand a day through 6.000 blocks.

What is Going on Now? Will the Ethereum Price rise?

The price has reached the level of $290 while around 6.000 blocks are being generated on daily basis, providing about 19.000 new ethers each day. The numbers have been relatively stable for the past month though that is to change as soon as the new hard fork takes place (Constantinople).

Also, the mining efforts have been increasingly difficult to the point where mining operations almost stopped having a meaning through PoW, with no new ether coming into the market. Different groups of businesses have taken their own stance in the wake of the desired direction of the coin, all of them pushing their own agenda.

 

There are 95,897,252.91 Ether already mined (8. November 2017)

 

Merchants are very happy with the change, as less ETH are in the market usually means higher price value at the end of the day. Miners are not so happy, as they have invested time, funds and equipment in their operations and finding that mining is almost rendered useless means a very unhappy miner.

 

Less new Ether in the market means normally higher price values.

 

Until Serenity, which might take time to come along as we are not even finished with Metropolis, it is widely expected for value to be either stable or growing, while the Ethereum mining and supply to remain on the same level as it is now.

Future Prospects: Opportunities and Risks

Now that we have dug out information from past and present, let’s take a look at what future shall bring by listing opportunities and risks first. Then we benchmarked them against each other and weight the gains against potential losses as to get the answer to the question on whether Ethereum is worth investing.

Opportunities

 with controlled inflation, the value of ETH would steadily grow over time, providing strong returns on investments made;

cloud mining provides additional security while cots would be lowered significantly;

 increased privacy through PoS platform orientation.

Risks

the failure of the hard forks might chase away investors currently engaged in the market, dropping the price significantly;

 the inflation might push the currency to fluctuate largely, losing its stability it enjoyed so far;

For opportunities to overpower the risks, it all depends on the future fork success, although we can now safely say that Ethereum’s value is bound to grow in next few months. The market is large and is poised to grow even further, thus we deem that opportunities right now are a lot stronger than risks involved.

Final Verdict

With growing market, Ethereum has positioned itself as the second biggest cryptocurrency after bitcoin in terms of market cap, stability, and a number of users involved in the network. The forks so far are achieving the goals that they have been created for and are moving the platform from PoW to PoS.

The mining rewards are decreasing, pushing the ETH value to grow while the development group is inserting a stable number of coins in the market to keep the stability. The opportunities, especially those presented by cloud mining, are yet to be fulfilled which could be said the same for risks.

Rest assured, the market has too many big players interested to be completely abandoned in within next year, no matter the success rate of coming forks but the history has shown that Ethereum has nothing to fear – it will continue to grow and maybe even surpass bitcoin if everything goes as planned.



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