I love Ethereum.
Ethereum is not just a digital currency but a digital currency platform that provide layer for other tokens to perform on the top of existing operation system.
While $ETH is approaching to $1,000, I believe it can change the entire blockchain system into next level for the next decades to come.
Fundamental Analysis
There is still plenty of rooms for $ETH to grow as there is still spaces to reach the overbought and also with ETH 2.0 shard chains improvement.
Why we care about ETH 2.0?
During 2018, cryptocurrencies prices collapse due to its inefficiencies of blockchain validation processes which you require large amount of spending to cover your transaction costs.
After years of improvement, Bitcoin was able to reduce significant transaction fees but there is a fundamental issue that Ethereum needs to resolve.
Layer-2 Blockchain Protocols and Replacement of Layer-1
Simply, layer 1 is blockchain that Bitcoin and Ethereum is able to automatically record transaction into ledgers. However, mining becomes more and more difficult when there are ever large demands of processing transactions. By growing too large of Merkle Tree, there is not sufficient powers to validate within short period of time.
It eventually becomes insufficient for computer power to validate such amount of transaction around the world.
Layer 2 has introduced to tackle issues of ineffective of blockchain system by introducing a bypass mechanisms that can both reward miners to validate transactions and process payments. And that is part of reasons you can stake your ETH 2.0.
Thanks for reading my posts.
If you want to learn more about Layer-2 blockchain protocals, here is the link of paper that I think it explains very well in details: https://eprint.iacr.org/2019/360.pdf
Disclosure: I/we have no positions in any cryptocurrencies mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose cryptocurrencies are mentioned in this article. These information are only for educational purposes.
