Wikicoin Alex Morris

ETH Crash? Ethereum Price Prediction: What Is Happening to Second Biggest Cryptocurrency?

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As Ethereum hits its lowest point of the year, U.Today digs deeper into why the second biggest cryptocurrency in the world is plummeting
ETH Crash? Ethereum Price Prediction: What Is Happening to Second Biggest Cryptocurrency?

At the epicenter of the bloodbath

After reaching its peak of $1,400, Ethereum has been steadily falling since May. As the lynchpin for many ICOs, it also took down many other altcoins.
image

Ethereum turned out to be one of the worst performing cryptocurrencies of the previous month (ETH price tanked by almost 33 percent). However, September is already shaping to be even a bigger disaster for Ether as the currency has recently reached its 16-month low. ETH current price is sitting at $172, losing a whopping 30 percent of its value in merely two weeks.
image

According to a recent U.Today report, Ethereum has also reached a record number of shorting positions, which is inextricably connected to this ongoing downtrend. However, some predict that this massive sell-off could trigger a “squeeze” (when the price of an asset rapidly increases because of the high level of shorting).        

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What's behind the decline?

Ethereum has been widely considered a major Bitcoin rival since its very launch since it represents an innovative platform that allows developers to build their own decentralized projects. However, the hype started to fizzle out, and the current coin’s price vividly shows that. Subsequently, it is important to understand the main reasons behind this Ethereum flash crash:

  1. Decentralized apps are great, but not everyone knows that. CryptoKitties, the only “killer app” contender in this niche, has an embarrassingly low number of users compared to an ordinary mainstream app (there is a good chance that the majority of its audience consists only of developers and testers). While they do make baby steps towards the mainstream adoption by planning their Asian expansion, it's too little too late for Ethereum. As a prominent economist Nouriel Robini states, casino games, scams and CryptoKitties pretty much represent the majority of dApps.

  2. Dwindling interest in ICOs. In order to seamlessly launch an ICO, one had to spend only about 20 minutes. The fact that basically anyone can create an initial coin offering resulted in an endless number of outright scams and projects that only have a white paper and the recent inflated ICO failure rate.

    “ Ether's price was inflated earlier due to the ICO mania," - BitBull Capital CEO Joe DiPasquale.

    Cryptocurrency analyst Kevin Rooke has also recently published an in-depth analysis of how ICO sell-off correlates with the current ETH price. Rooke concludes that ICOs are selling Ether in droves (more than $30 mln last week alone). However, the biggest revelation is that ICO also hold a staggering amount of $600 mln worth of Ether, and it’s safe to say without an ounce of exaggeration that Ether’s future solely depends on whether these companies further decide to hold Ethereum in their treasuries.   

  3. A tough competition. Ethereum might have the first mover advantage, but its bigger competitors in the likes of Stellar, NEO and EOS might already dethrone it in the nearest future.

  4. Bearish market sentiment. Ethereum may be one of the biggest losers of the past few months, but one shouldn’t forget the whole cryptocurrency industry is going downhill partly because of regulatory uncertainty in the US. The SEC rejection triggered a knee-jerk reaction, immediately causing Bitcoin to plummet. On Sept. 10, another meltdown started after the US SEC ceased trading on two crypto-based securities.  

Predictions from Ethereum founders

Who knows better about the future of Ether than its founders? Now we would like to cover some of their predictions.

First of all, of course, we are going to focus on what Vitalik Buterin has to say. During a recent Bloomberg interview Vitalik made headlines, stating that the cryptocurrency space will never see the industry mammoth-size growth again. He claims that this is due to the fact that the industry is witnessing mainstream recognition around the globe.

Vitalik is not overly optimistic about the future of crypto and Ethereum in particular. Back in February, when Ethereum went from $1,400 to $580, he warned investors about the immense volatility of the industry. Recently, he yet again adopted a note of caution after an explosive op-ed written by Stella’s Jeremy Rubin. Rubin claims that an Ethereum price crash is imminent because of its fees that are dubbed “gas.” Remarkably enough, Vitalik agreed that Ethereum could indeed hit zero, but he claims that there are proposals which would forbid applications to pay for “gas” in non-Ethereum assets.

“Reminder: cryptocurrencies are still a new and hyper-volatile asset class, and could drop to near-zero at any time,” - Vitalik Buterin, Ethereum cofounder.

image
Another Ethereum co-founder Joseph Lubin said that a dramatic Ethereum crash in price is not an indication of the currency’s future growth. He considers that volatility is normal, and the cryptocurrency industry is moving in the right direction. As U.Today reported recently, he doubled down on his stance during a CNN interview.

Industry bigwigs weigh in

Ethereum has been on the lisps of the biggest names in crypto. Let’s have to say what they have to say about the future of Vitalik Buterin’s creation.    

Olaf Carlson-Wee, CEO of the biggest crypto-oriented hedge fund Polychain Capital, voiced one most vanguard Ethereum price prediction for 2018, claiming that the so-called flippening scenario will happen as earlier as in 2018. This prediction was made during the peak of the crypto craze in December. As Ethereum keeps dropping like a rock in September, we can say with confidence that it's not the case.

When will Ethereum crash? Speaking of more long-term predictions, Changpeng Zhao, the CEO of the largest cryptocurrency exchange Binance, feels extremely bearish about the future of Ether, claiming that the currency will be eventually overshadowed by more efficient technologies like EOS. Even considering that mainstream decentralization is inching closer, Ethereum won't take advantage of it, according to CZ.

Arthur Hayes, Co-Founder & CEO of BitMEX, has also recently lashed out at Ether, claiming that it should “go down to double digits.” Remarkably, earlier BitMEX launched a swap product that would let users bet against Ethereum, which many experts believe also a had a visible impact on the value of Ethereum.  

An extremely bullish forecast for 2018 was offered by Reddit co-founder Alexis Ohanian. Back in May, when there was no indication of a dramatic price decline, Ohanian said that Ethereum would reach $1,500 by the end of 2018. While the second cryptocurrency is indeed poised to appear in the double-digits territory if market bears persist, this prediction, while not being completely outlandish, doesn’t seem realistic (although it could be relevant when it comes to Ethereum price prediction for 2020).   

The recent announcement about upcoming CBOE Ethereum futures gave ground for many speculations about the potential ramification for Ethereum. Tom Lee, a well-known Bitcoin pemabull, doesn't that Ethereum futures will not have a short-lasting effect on the coin’s price. However, it’s rather challenging to predict the reaction of a highly volatile cryptocurrency market when a mainstream financial institution makes a move towards crypto adoption.

More Ethereum price predictions

Expert

Prediction  

deVere Group

$2,500 by the end of 2018 with even bigger growth in 2019 and 2020

Investing Haven

$1,000 by 2020, but 2018 is a possibility

Finder panel of Blockchain experts

Ethereum will rise by 82 percent


The bottom line

So, will Ethereum crash? While many are inclined to think so given its epic fall over the last two months, it's actually too early for a definite answer. This technology is still in the early stage of its development on its, so the prolonging bearish trend is more its first litmus test rather than a death sentence.

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Bitcoin, Ethereum, Ripple, EOS, NEM Bulls Take Control, Significant Gains Across Board: Price Analysis, July 17

Pricewise
Bitcoin price, altcoins go up, bulls take control of the market again
Bitcoin, Ethereum, Ripple, EOS, NEM Bulls Take Control, Significant Gains Across Board: Price Analysis, July 17

Bitcoin price and the prices of altcoins developed their upside progress Monday. The currency pairs have had significant gains in the past 24 hours. A bullish mood is returning to the market which may result in higher prices.

In the news, the Shanghai Stock Exchange looks to introduce distributed ledger technology to improve the  security of trading operations. This will include registration procedures and other important factors.

Coinsuper crypto exchange made a significant step forward as this platform is among the most popular exchanges now. However, some experts accuse the exchange in fake trading volumes.

Bitcoin (BTC/USD) price analysis, July 17

More than five percent added in the past 24 hours. Bitcoin looks very bullish currently as the currency pair is close to July’s tops. We think that BTC/USD is likely to develop this positive tendency and establish new highs in the nearest future.

Bitcoin (BTC/USD) Price analysis, May 25

Bitcoin has reached our targets on Monday as BTC price had a significant momentum. BTC/USD has jumped over a couple of resistance levels including $6,510 and $6,701. This upside momentum is likely to continue on Tuesday.

As for the main scenario, we think that Bitcoin will develop its growth targeting the next resistance at $6,943. There are no signals currently, but the currency pair is above the support at $6,701 and still looks bullish.

However, if bulls will be unable to develop their progress, bears may start a correction targeting the support area at $6,510.

Ethereum (ETH/USD) price analysis, July 17

Ethereum has added more than seven percent in the past 24 hours. The bullish flag is done currently but it helped traders to make the right decision we hope. The currency pair is close to its July’s highs and we think ETH/USD is likely to develop this positive trend in the nearest future.

Ethereum

Ethereum has jumped over a couple of resistance areas including $453.24 and $473.39 and currently is above the last one. ETH/USD looks bullish and we think it is going to reach July’s highs within Tuesday-Wednesday.

The main scenario for today is bullish as well. Ethereum is likely to reach the next resistance area at $500.36. Buyers seem to dominate the market and are likely to develop their progress. However, if sellers take short-term control over the market, they will be able to start a correction towards the support area at $453.24.

Ripple (XRP/USD) price analysis, July 17

Ripple has reached the targets we have set on Monday. The currency pair added almost eight percent in the past 24 hours and looks very strong. Buyers have taken control over the market and drive XRP/USD higher targeting July’s highs.

ripple

Let’s have a closer look at the currency pair and the current situation. XRP/USD has passed two resistance areas at $0.4495 and $0.4744 already. Ripple is trading above the last one at the moment of writing. However, we think that XRP/USD looks very promising and is able to reach new tops.

The main scenario for Tuesday-Wednesday is growth towards the next resistance at $0.5088. We think that this target will be reached in the nearest future. There are no patterns currently, but XRP/USD looks very promising currently.

As for the alternative one, Ripple may decline towards the support area at $0.4495. However, sellers will have to jump over the closest support at $0.4744 in this case.

EOS (EOS/USD) price analysis, July 17

More than 10 percent in the past 24 hours! This is the result of EOS’ growth on Monday. The currency pair seems to develop is progress as buyers are controlling the market currently. EOS/USD is likely to grow again, but it is still far from July’s highs.

eos

EOS has worked out a flag pattern and moved higher. The currency pair has broken through the resistance area at $7.65 and failed to reach the next resistance area at $8.29. However, we think that this is just a matter of time.

We think that growth is the main scenario for Tuesday. Buyers and investors are hungry for a bullish trend and they have total control over the market currently. Targets for this bullish trend are at July’s highs at least. EOS/USD is able to reach the resistance area at $9.03. However, buyers will have to jump over the closest resistance at $8.29 first.

As for the alternative view, bears may also gain control (but unlikely to). If this happens, they will push the currency pair lower targeting the support area at $7.10. They will also need to jump over the closest support area at $7.65 in this case.

NEM (XEM/USD) price analysis, July 17

NEM has added more than nine percent in the past 24 hours. The currency pair looks very promising and follows the allies. Buyers seem to have full control over the market and they are able to reach new tops on Tuesday-Wednesday.

nem

XEM/USD has jumped over the resistance area at $0.1682 and went higher on Monday. However, NEM failed to reach the next resistance at $0.1873. The currency pair stays below this level at the moment of writing.

The main trading idea for XEM/USD is a bullish scenario. We think that XEM/USD is likely to jump over the closest resistance area at $0.1873 in the nearest future and target the next resistance at $0.2002, where July highs lie.

However, bears can start a correction, with a  target at the closest support area of $0.1682 at least.

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Is British Pound Going Up? Forex & CFD Weekly Forecast

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Our expert reasons about the weekly situation on the Forex market and predicts the growth of the British Pound
Is British Pound Going Up? Forex & CFD Weekly Forecast

On Friday, Nov. 2, 2018, the US dollar pared losses on surprising the US nonfarm payroll data. The US Unemployment Rate for the month of October 2018 actual figure was 3.7% vs. 3.7% forecast, and the USD Change in Nonfarm Payrolls actual figure was 250K vs. 200K forecast.

These strong numbers pointing a solid growth in the US labor market will be the focus for the US Dollar trend this week as we are approaching the midterm elections and most importantly the FOMC Rate Decision on Thursday, Nov. 8, 2018. This week, there are three monetary policy decisions from the Fed, the Reserve Bank of Australia, and the Reserve Bank of New Zealand, all of them being key economic events.

These are the main forecasts for EUR/USD, GBP/USD, and USD/JPY this week.

EUR/USD Forecast

EUR/USD

Weekly Pivot Points for the pair are S1 1.1307, Pivot 1.1382 and R1 1.1461. As the pair is trading under its 20-period and 50-period EMA daily moving averages, there should be a range trading between 1.1450 and 1.1300, favoring the downside.

GBP/USD Forecast

British Pound strengthened the previous week over favorable news regarding Brexit. Is it likely to continue the bullish momentum in the coming week?

GBP/USD

Weekly Support & Resistance Levels:

Support

Resistance

1.2707

1.3021

1.2585

1.3212

1.2272

1.3525

  • Key Trading Level: 1.2899

We estimate that the recent move was a result of positive sentiment over Brexit news; no fundamental event to support it and profit taking should result in a trading range between 1.30 and 1.28 favoring the downside. On Friday, Nov. 9, 2018, the GDP Growth Rate for the third quarter is a key economic event with expectations for an increase for the yearly figure at 1.5% vs. 1.2% previous figure and 0.6% vs. 0.4% previous figure for the quarter.

AUD/USD Forecast

Weekly Support & Resistance Levels

Support

Resistance

0.703

0.7138

0.6971

0.7188

0.6863

0.7297

  • Key Trading Level: 0.708

We anticipate no change to be made at the latest Reserve Bank of Australia monetary policy decision on Tuesday, Nov. 6, 2018, keeping the key interest rate unchanged at 1.50%. A trading range of 0.72–0.70 should hold, favoring the downside as the pair is trading below its 20-period and 50-period EMA daily moving averages.

AUD/USD

How about the situation on the US stock market?

Keep an eye out for the midterm elections, an interest rate decision from the Fed, and earnings from big names like Disney and Marriott.

Apple Stock

On Thursday, Nov. 1, 2018, Apple (NASDAQ: AAPL) released its earnings for its fiscal fourth quarter, and these were the actual vs. forecasts:

  • Earnings: $2.91 per share vs. $2.78, forecast by Refinitiv consensus estimates

  • Revenue: $62.9 bln vs. $61.57 bln, forecast by Refinitiv consensus estimates

  • iPhone sales: 46.89 mln vs. 47.5 mln, forecast by FactSet and StreetAccount estimates

  • iPhone average selling price (ASP): $793 vs. $750.78, forecast by FactSet and StreetAccount estimates

Despite a beat on both earnings and revenues, shares of Apple fell more than seven percent — falling below its historic $1 trillion market cap following the release closing at $207.48 on Friday, Nov. 2, 2018.

Although the stock is now trading below its 20-period and 50-period EMA daily averages, a price near the $200 psychological level should provide a bounce towards the recent $233.47 52-week high price a buying opportunity.

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Bytecoin Price Prediction- How Much Will Bytecoin Coon the Future?

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Bytecoin is generally considered to be a good contender among next big cryptocurrencies that may rival Bitcoin
Bytecoin Price Prediction- How Much Will Bytecoin Coon the Future?

What is Bytecoin?

Some people mistakenly suggest that Bytecoin (BNC) is Bitcoin’s fork, but this cryptocurrency appeared on the market as early as in 2012. Bytecoin is particularly remarkable since this is the first coin to use the CryptoNight algorithm. As of now, many altcoins (including Electroneum (ETN) and Monero (XMR)) are based on this PoW algorithm.    

If Bytecoin used the same algorithm as Bitcoin, it would be ineffective to participate in mining process without special hardware. That helps to solve Bitcoin’s mining monopoly problem. Subsequently, the Bytecoin mining community is significantly more decentralized.

It is also important to mention that Bytecoin belongs to the so-called privacy coins which means that there is a big emphasis on keeping all transactions untraceable (in fact, this is the first truly anonymous coin out there). For comparison, all Bitcoin transaction data is recorded on a public Blockchain.

With a current market cap that is approaching $600 mln, there is no doubt that we are looking at a very serious project which attracts lots of investors around the globe.

Bytecoin price predictions in 2018

Bytecoin is the 24th biggest coin by market cap (according to the data provided by coinmarketcap.com). The currency was listed on a couple of new prominent exchanges including (Poloniex and HitBTC) in March which significantly increases its exposure and may cause a spike up in price. Bytecoin has also recently made an announcement about its partnership with OKEx.

Bytecoin price predictions

While analyzing the current performance of Bytecoin, one can come one with the following Bytecoin 2018 price prediction in the table below.

NB! Despite the fact that our financial experts analyzed numerous factors that include current market capitalization, recent market trends and Bytecoin’s development roadmap, you should consider the following Bytecoin (BNC) price prediction cautiously, since this is not an investment advice.

Month (2018)   

Price Prediction

July

$0.01350

August

$0.01470

September

$0.01667

October

$0.01745

November

$0.02200

December

$0.02350

As of July 2018, you can already see that Bytecoin foundation price prediction was too optimistic. The same goes for Bytecoin price prediction 2017.

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Bytecoin price prediction

Bytecoin and Dogecoin show almost the same price fluctuations. Price prediction of Bytecoin states that by the end of 2018, Bytecoin isn’t expected to increase much, but it has a lot of room to grow(especially if you take into consideration the fact that the max and circulating supply keep getting closer). Right now, it is extremely hard to make Bytecoin future price prediction.  

cryptocurrency markets

There are numerous factors which affect the cryptocurrency markets. They include:

  • media coverage (major media outlets can be easily used to manipulate public opinion and change Bytecoin prediction price)

  • BTC price (Bytecoin and the majority of other altcoins usually reflect Bitcoin’s price volatility)

  • government regulations (numerous political events and regulatory efforts can easily affect Bytecoin price prediction 2018)

  • technological progress (talents from major companies are fleeing in droves to build own ICOs startups, so Bytecoin has to keep up with them)


Most likely, Bytecoin is not going to pass the $1 mark anytime soon. In order to achieve that, Bytecoin has to be the biggest currency with $183 mln capitalization (surpassing Bitcoin if the so-called ‘flippening’ scenario does happen) which doesn’t seem to be plausible.

The market cap has to hit about $3 tln for the $1 dollar prediction to translate into reality. It is definitely not out of rich in three or four years if the first Blockchain government appears and Bitcoin’s price surpasses $30,000. However, as mentioned above it is too early to come up with Bytecoin price prediction 2020 much less Bytecoin prediction 2025.    

Is it worth investing in Bytecoin?   

You should obviously consider any price prediction of Bytecoin at your own risk, but it is obvious that Bytecoin isn’t going anywhere anytime soon. First of all, it is the first privacy coin that has already been on the crypto market for six years. Another important indicator of Bytecoin’s upcoming success is that it constantly partners up with different merchants. As long as Bytecoin’s team keeps promoting its coin, list it on bigger exchanges and involve new merchant, big price jumps in the nearest future do not seem too far-fetched, but Bytecoin price prediction 2020 is still too early to make.   

There is no point in implementing top-notch technological features if a coin is simply stored in crypto wallets and not used by people for performing day-to-day financial transactions. Bytecoin has a significant advantage over other coins (in particular, Bitcoin) because of its relatively fast transactions. However, there is also another bigger anonymous coin Dash (DASH) which allows its users to perform transactions in a matter of seconds because of the InstantSend feature.

While complete anonymity is generally considered to be a positive feature, it may also prevent Bytecoin from increasing its value in the future which is expected according to the recent Bytecoin (BTC) price prediction 2018. The thing is that many countries move towards common-sense regulations in an attempt to move cryptocurrencies out of a legal gray zone. For instance, Japan, a country which is responsible for almost 40 percent of Bitcoin’s global trading volume, cracked down on exchanges that list the aforementioned privacy coins. It is also worth mentioning that Bytecoin’s team of developers remains anonymous as well, so it is difficult to determine the token issuers who stand behind the project. It obviously gives ground for shady financial operations.

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Alex Morris

Blockchain History: From Ancient Fei Stones to Disruptive Technology That Underpins Bitcoin and Other Cryptocurrencies

Blockchain history before Bitcoin and Blockchain history after Bitcoin: Learn more about the nascent technology, Blockchain’s history, and the technology’s future
Blockchain History: From Ancient Fei Stones to Disruptive Technology That Underpins Bitcoin and Other Cryptocurrencies

Introduction to the state-of-the-art technology

Blockchain is a disruptive technology that is making waves throughout the globe, revolutionizing a slew of industries (from banking to the global shipping industry). Many pundits, including Zillow’s CEO, believe that this nascent technology has more potential than the Internet, while Binance’s founder believes that the idea of mainstream decentralization is not that far-fetched. In this article, we will take a closer look at the history of Blockchain to eventually make a prediction about what the future holds for this technology.

Blockchain

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Decentralization: A 1,000-year-old concept

Before we begin discussing the history of Blockchain in detail, we would like to share with you an outlandish suggestion made by cultural anthropologist Natalie Smolenski, who believes that Blockchain could have actually appeared almost 1,000 years ago (of course, not in the form of a distributed ledger). Smolenski says this is one of the “old wine in a new bottle” situations when the already established transitions of some ancient tribes have a lot of in common with (you guessed it) Blockchain.  

“Like all breakthroughs, Blockchains are a profoundly new way of doing old things,” Natalie Smolenski

In 500AD, the tribe of the Yap Island used gargantuan Fei stones as their form of currency, but they had to tackle the problem of mobility: these stones were too bulky to move around. Subsequently, they came up with an idea to create what could be considered the very first decentralized ledger in history — every tribe member knew exactly who owned a specific stone, which would eliminate the need for further disputes.  

Remarkably enough, such ‘transactions’ lasted up to the 19th century on Yap Island. Then the villagers ditched this tradition and switched to the US dollar. It is also worth mentioning that such a practice was never adopted outside of the tiny island. It actually represents what exactly Blockchain is today; instead of a mental ledger, there is a mental one, which binds together millions of computers around the globe. Most probably, the Yap villagers never realized that they’d come up with a truly revolutionary technology.

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Philosophical and technical bases behind Blockchain  

While claiming that the inhabitants of the Yap Island might indeed be responsible for the emergence of Blockchain technology sounds far-fetched, the seeds of this state-of-the-art invention may go back directly to the 1940s. During the peak of the World War II, genius British cryptographer Alan Turing made a breakthrough by deciphering the Enigma machine.

1974 Nobel Prize winner Friedrich Hayek, who became famous because of his magnum opus ‘Decentralization of Money’, is considered to be one of the biggest philosophical influencers in the history of the cyberpunk movement. Ayn Rand was among other inspirations: she came up with the idea of ‘Galt’s Clutch’, a secluded community that would one to distance himself from corrupt institutions.

This magnum opus predicted the decentralization of money, which would help stomp out government-backed monopolies. Bitcoin, the first privately issued money, is a stepping stone for the implementation of Hayek’s vision.

When it comes to technical bases, Bitcoin — as well as the technology that underpins it — is based on cryptography (a huge chunk of information is shared between encrypted computers worldwide). In 1976, the Diffie-Hellman algorithm allowed securely exchanging cryptographic keys by dividing them into private keys and public keys. Ralph Merkle, in turn, is responsible for the creation of public-free cryptography (Merkle Tree). These inventions were essential for the establishment of Blockchain technology.

Philosophical and technical bases behind Blockchain

In 1991, way before Blockchain became the ultimate ‘buzzword’ of recent years, Haber and Stornetta published a paper entitled “How to Time-Stamp a Digital Document”. The document describes a tamper-proof method of time stamping, which would make it impossible to stamp an inaccurate date on a document. This seemingly groundbreaking technology went unused, and the patent expired in 2004, remaining a remnant of history.   

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Blockchain’s public debut in Satoshi’s white paper  

Since then, the development of the Blockchain technology remained in limbo. In 2008, however, everything has changed for good with Satoshi Nakamoto introducing the white paper of Bitcoin, the first decentralized digital currency that later took the whole by storm. The rest is history.  

Blockchain’s public debut in Satoshi’s white paper  

(Source: Bitcoin.com)

Bitcoin became the first known use case of Blockchain technology in history (if we don’t count the aforementioned Fei stones). After the release of the white paper, the first open source client of Bitcoin appeared back in January 2009.

The term “Blockchain” made its first public appearance only in Satoshi’s ubiquitous white paper.  It is worth mentioning that Satoshi didn’t use the term ‘Blockchain’ in his work — the technology was actually represented by two separate words (‘block’ and ‘chain’).

While there were some remotely similar technologies, there is no doubt that Satoshi (whoever this elusive creator is) can be regarded as the founder of Blockchain. There is also an alternative opinion that Blockchain wasn’t created by anyone, and it simply represents an evolution of a technology that combines three elements (cryptography, distributed networks, and consensus protocols).

The thing is, Satoshi’s white paper actually suggests that Blockchain and cryptocurrencies are two inextricably connected notions, and there was no life for this technology outside of the digital money space (despite almost a decade-old history).

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Blockchain separates from Bitcoin

While Bitcoin remains the biggest use case of Blockchain, more and more companies and organizations are inching closer towards decentralization in order to increase their efficiency.

Blockchain separates from Bitcoin

(Source: Bitcoin.com)

The very first precedent was set by a startup dubbed Namecoin that wanted to democratize the current management system. The domain names are mainly controlled by centralized entities, and they have long been a matter of grave concern for Internet freedom advocates. There have already been a couple of occasions when the US government would seize the site’s domain. By storing all domains on a distributed ledger, Namecoin would make it impossible to correct the registration data. The government would need an encryption key in order to seize this domain.

As the popularity of cryptocurrencies began to grow, many people started confusing Bitcoin and Blockchain, the technology that underpins all decentralized digital assets. During 2013-2014, when Bitcoin started showing the first signs of mainstream adoption, Blockchain also appeared in the limelight, and many realized that its use cases might extend far beyond crypto with this technology being actively applied in a myriad of industries (healthcare, transportation, etc.). Individual companies and even whole countries started pouring money into Blockchain. For instance, the South Korean budget is set to allocate a staggering $925 mln to further develop the Blockchain technology (one of the biggest fintech-related investments in recent history).      

The rise of Ethereum

The next era in the development of Blockchain is associated with one name: Vitalik Buterin, one of the developers behind the Bitcoin codebase who decided to come up with his own project due to numerous programming limitations. While he saw the Bitcoin ecosystem forming a distinctive shape, he realized that many crypto projects that were still in a stage of inception needed the common ground to build on.

As a result, Ethereum, the second public Blockchain, appeared on the horizon along with a groundbreaking invention of the so-called ‘smart contract’. The 2013 Ethereum white paper already went down in history. In mid-2014, the Ethereum yellow paper was released, with Gavin Wood specifying the modus operandi of the Ethereum virtual machine (EVM).  

The rise of Ethereum

(Source: Getty Images)

The major advantage of the Ethereum Blockchain consists of the ability to record various kinds of assets, not being restricted strictly to cryptocurrencies. Smart contracts have already witnessed a widespread adoption with tech giants such as Microsoft using it to cut red tape. Even critics who argue that Ether (the currency) is doomed to fail, they admit that the Ethereum, which embodies the second-generation Blockchain system, is here to stay. There are hundreds of active projects that were built on the Ethereum Blockchain, representing a huge imprint on the history of the technology.     

Apart from smart contracts, Ethereum birthed the concept of the so-called decentralized organizations (DAO), which represent the whole corporations that are operating with the help of smart contracts.   

The creation of Ethereum eventually resulted in the ability of developers to create the applications that run inside it. Decentralized application (dApps) represents the next logical step in the development of the technology — there are already hundreds of such applications that are powered by Ethereum. Instead of Twitter or Spotify with a centralized governing model, dApps offer more freedom to users, enhancing stability and eliminating numerous censorship issues. Still, there are numerous caveats that are linked to their adoption: dApps fail to grow their user base due to their poor usability.  

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In general, the evolution of Blockchain could be described in several stages:

Stage 1: Bitcoin

At first, the Blockchain was solely used as an underlying technology for Bitcoin (and later other cryptocurrencies). Bitcoin became the first decentralized digital currency in history.      

Stage 2: Ethereum Blockchain

With the implementation of smart contracts, a slew of assets could be recorded on a distributed ledger. Furthermore, the technology gave a huge boost to the adoption of Blockchain outside of cryptocurrencies.

Stage 3: DApps

Blockchain is inching closer towards run-of-the-mill users with decentralized applications that are supposed to come as a viable replacement for traditional applications.   

Stage 4: Cross-Blockchain

The scenario when Blockchain finally becomes usable in the real world, disrupting many industries.  

Transition to proof-of-stake Blockchain consensus algorithm

If you are somehow familiar with cryptocurrencies, you are definitely now new to the concept of cryptocurrency mining. This is a process of cooperating Bitcoin many nodes on the network. Blockchain technology allows recording all the data on a distributed ledger, which basically means that it is stored on a gargantuan number of computers around the globe. For the whole network to function properly, there should be a robust consensus mechanism in place.

The original consensus mechanism is called Proof-of-Work (PoW). The peculiar thing is that the PoW mechanism dates back to the 90s, long before Satoshi came up with a ubiquitous Bitcoin white paper (the actual term was proposed by Markus Jakobsson). Still, this consensus algorithm became commonly known along with Bitcoin. According to the white paper, PoW would help solve security concerns, preventing the much-feared 51 percent attack. There is a block reward involved for every cryptographic puzzle solved by an individual miner or a group of miners.

However, due to numerous disadvantages of PoW (huge energy consumption, geographical limitations, etc.), a new consensus algorithm emerged on the horizon: Proof-of-Stake (PoS). When it comes to proof of stake, the creator of a new block is defined based on his stack of coins.

Transition to proof-of-stake Blockchain consensus algorithm

The currencies that are based on this consensus algorithm do not presuppose a block reward; miners profit off transaction fees. Hence, the PoS algorithm is a significantly more cost-effective option. PoS-based coins help to tackle the problem of energy saving that has always been an issue as far as Bitcoin mining is concerned. As U.Today reported earlier, Bitcoin mining has such a great impact on the environment that it could potentially boost climate change.

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Tackling the scalability trilemma with altcoins

The next logical step in the history of Blockchain development consists of finding new scaling solutions. Some naysayers bash Blockchain because transactions take a very long time to be conducted compared to more established financial systems (VISA, Swift). With Bitcoin Blockchain, it is only seven transactions per second (TPS). Ripple, on the other hand, shows much more impressive results with 1,500 TPS, but there is still much homework that needs to be done in order to match the processing power of the VISA network that is able to process 24,000 TPS (although, Ripple is already six times faster than PayPal). Ripple shouldn’t be confused with the actual cryptocurrency (XRP) — it’s a Blockchain-powered startup that is currently getting a big number of banking clients on board with its new xRapid product.  

Coming up with a scalable Blockchain solution is an easy feat due to what is known as the scalability trilemma. The essence of this trilemma is that the Blockchain network is only capable of having only two out of the following three features: decentralization, security, and scalability. Blockchain and Ethereum put emphasis on the first two, which takes a toll on the speed of transactions. Still, a scaled Blockchain that would be able to outperform them — conducting millions of transactions in a snap — is yet to be done in history, but some promising projects are already in the offing.

Altcoins with separate Blockchain seems like a plausible solution to the scalability problem since it would significantly reduce the user base. Notably, there is a full stack of scalable Blockchains in the offing, with Ethereum 2.0 leading the way. Cardano, on the other hand, is already here: the reputed project spearheaded by Charles Hoskinson is considered to be the third generation of Blockchain because of its scalability and interoperability.

Other third-generation Blockchains to watch in 2018:

  • Zilliqa;

  • EOS;

  • ArcBlock;

  • Aion.  

Each of the aforementioned third-generation Blockchains aim to tackle the main issues of Bitcoin and Ethereum in their own way with a major emphasis being placed on scalability.   

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The growth of Blockchain: talking numbers

According to one of Deloitte’s research papers — which aims to illustrate the evolution of Blockchain with the help of GitHub data — there have been more than 87,000 Blockchain-related projects. Perhaps the most striking finding actually pertains to the number of currently working projects; the longevity in the Blockchain industry is very poor, with only 8 percent of projects still being maintained by their developers.

Nevertheless, there is still a very positive trend when it comes to the number of projects developed by  commercial organizations: it has skyrocketed since 2009, serving as a clear indicator of wider Blockchain adoption. It is especially important for the industry because such projects tend to be updated more often while holding more significance.  

The growth of Blockchain: talking numbers

However, Blockchain adoption is still rather snail-paced with regulatory uncertainty being the main issue. A new PwC survey showed that 27 percent of CEOs think that lack of legal clarity remains the main hindrance with lack of trust among users coming in second place (25 percent).

The future of Blockchain  

As mentioned above, a lot of banking institutions (including such behemoths like Morgan Stanley, are already jumping on board with Blockchain adoption since the technology has the potential to increase the efficiency transaction processing. However, it doesn’t stop there — dozens of industries are already unitizing it. Whether it’s giving refugees a chance to restore their identity or preventing food poisoning, there’s one ‘magic wand’ that helps to modernize everything with the help of decentralization.
Since no one is able to alter data on a Blockchain, it’s a perfect solution for record keeping, and there is a myriad of future use cases where Blockchain could come in handy. Ironically, there’s even a Europe-based startup called Kapu that puts the whole history on a Blockchain in order to have a risk-proof source of all kinds of historical data.   

With that being said, Blockchain has many critics (and their list not limited to the unhinged Bitcoin opponent Nouriel Roubini). They claim the technology is overhyped, and cryptocurrencies still remain the only major use case. dApps (decentralized applications) fail to get a grip of a real user base while many Blockchain-related projects are only in a trial phase. While it is partially true, it is quite reasonable to assume that the mass adoption of Blockchain won’t happen overnight – it would take years or even decades for the technology to catch up, and there has been a lot of progress since the inception of Bitcoin. Case in point: it took the Internet almost four decades for this technology to break into the mainstream (its foundations were created as early as in the 60s).  

Meanwhile, the US — the current leading market for Blockchain development — is expected to cede ground as early as 2023. China, which retains its hawkish stance towards crypto, is betting big on Blockchain, going as far as issuing Blockchain-related guidelines for its officials. Remarkably, the UK’s current 5 percent share in the crypto space is expected to shrink to just 2 percent.

The future of Blockchain  

One also cannot exclude the possibility that Blockchain might not be the same technology that we know today. A lot of companies, for instance, are already trialing so-called ‘private’ Blockchains that allow sharing data only within a small circle of individuals, and there is always a chance that another groundbreaking invention will turn Bitcoin and Ethereum into history.

No matter what future holds for Blockchain, one thing is crystal clear: the world will never be the same after its invention.

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