by Tanzeel Akhtar
The second largest cryptocurrency, Ethereum, went through a hard fork yesterday which saw Ether hit an all time high of $348. The total market cap for Ethereum has now reached $32.1 billion.
Though Bitcoin remains the number one cryptocurrency by far, with a market cap of $94.5 billion, there are some who believe Ethereum may be the better opportunity for investors. What distinguishes Ethereum from Bitcoin is the technology behind Ether, the unit of cryptocurrency used on the Ethereum blockchain. As well, Ethereum relies on ledger technology, a decentralized type of database that's spread across multiple sites, regions and participants. In addition, there are two different types of Ether: Ethereum and Ethereum Classic.
Irfon Watkins, CEO of UK-based dovu.io, a Blockchain-powered mobility firm which is built on Ethereum explains that Ether has risen in value ahead of this first phase of the cryptocurrency's hard fork, dubbed Byzantium. As second phase, referred to as Constantinople isn't expected until sometime next year.
Unlike the recent Bitcoin hard fork, which created two separate digital coins—Bitcoin and Bitcoin Cash—Ethereum's hard fork did not create a new coin, but rather improvements in its ability to scale and create anonymity within the chain. Many liken yesterday's hard fork for Ethereum to a software upgrade that improves the product without altering its essence. In this case, the hard fork will help secure Ether and Ethereum's role within more corporations, thus ultimately increasing its valuation.
Watkins says:
“We are still in the first phase of Ethereum. The price will increase significantly over the coming months and this constant upgrading of the protocol is the reason we at Dovu are building our business on Ethereum.”
Byzantium Hard Fork Provides Scalability, Reliability
As mentioned earlier, yesterday's hard fork was the “Byzantium” phase. Mike Raitsyn, founder of UK-based ICOBox, a provider of SaaS-based fixed-price services for ICO said the Ethereum community is celebrating the Byzantium hard fork as a long-awaited step in moving from a proof of work algorithm. He notes:
“We see it [the Byzantium hard fork] as a great achievement in terms of scalability and reliability of Ethereum network solving some old issues like permitting error handling reasonably and at the same time postponing the "difficulty bomb" to let community for adjusting. It's a pleasure to see that new hard fork is running so smoothly and without battles within Ethereum community comparing with what's going in Bitcoin.”
Bull Run Ahead for Ethereum
Though Ethereum's price consolidated during the past month, even as Bitcoin has been hitting new record highs including breaking through the $5,000 benchmark, since mid-September Ethereum has been steadily pushing higher.
Jeremy Harkness, a blockchain officer based in New York explained that Ethereum and all “ERC20 tokens” will by far exceed the market capitalization of Bitcoin in the coming months. ERC20 is a common list of rules for all Ethereum tokens to follow - the token empowers developers of all types to accurately predict how new tokens will function within the larger Ethereum system.
The spot price of ETH is likely to slowly creep closer to that of Bitcoin in 2018, approaching $1,200 in the second quarter of 2018. But predicts Harkness, once the dust clears and the hard-forks are over, the price of ETH will rally in late November and may test the $500 range. It may even test $600 - $800 by year-end, he believes.
Another feature of the ETH hard fork is the introduction of “Zero Knowledge Proofs,” a protocol that enhances privacy for owners, allowing them to verify ownership without revealing any restricted information. Specific to Ethereum, this is expected to provide users privacy by allowing for the masking of a sender, the receiver and the amount sent in Ethereum transactions.
Additional improvements will also allow for cheaper, more reliable contract execution, which will further support Ethereum adoption, resulting in an extremely vibrant ICO marketplace in 2018.