Three long-term and in-depth good news for Ethereum.
On the evening of November 18th, Beijing time, the Ethereum Foundation conducted an AMA online Q&A on reddit, a well-known overseas forum, and responded to several important issues involved in the future development of Ethereum.
These issues are not only technical issues, but some are directly related to the future price of Ethereum and are closely related to the interests of investors. Therefore, I have selected some important issues to share with you.
This is a matter of great concern to all Ethereum investors.
Bitcoin has only 21 million circulations. Everyone knows this. Many people regard this feature as the key driving force for the continued rise of Bitcoin prices.
But when it comes to Ethereum, the second largest cryptocurrency, there is no upper limit for this issuance. There is no hard limit on the circulation of Ethereum, so many investors always have certain doubts about the future price of Ethereum.
This situation was not changed until the Ethereum community put forward the EIP1559 proposal. Once this proposal is implemented, it may have a significant impact on the stock of Ethereum. In this AMA online question and answer, several key developers, including V God, gave detailed responses to this.
What is EIP1559? It is a proposal to change the processing of Ethereum transaction fees.
We all know that in the current Ethereum, every transaction needs to pay a handling fee, and the handling fee of these transactions will be given to the miners.
EIP1559 will change the composition and attribution mode of handling fees.
In terms of composition, this proposal divides the commission into two parts: one part is called the basic fee, which is the same for all transactions and must be paid by all traders; the other part is called the “tip”. It is the part voluntarily paid by the trader for the transaction.
In terms of the attribution of the handling fee, the basic fee will not be paid to the miner but will be completely burned. Only the “tip” will be paid to the miner. The higher the tip, the more likely the transaction of the trader is to be packaged by the miner first.
Because the basic fees will be burned, this creates a deflationary mechanism for Ethereum. The more online transactions, the more handling fees burned, and the more obvious this deflationary effect.
At present, the annual additional issuance of Ethereum is about 4 million. When the EIP1559 proposal is implemented, due to the existence of the destruction mechanism, in the future, the new coins added to Ethereum each year will be reduced to only about 1 million coins, and it is even possible that not only will it be redundant, but part of the current will be destroyed. Some stock.
Therefore, in general, the future dynamic stock of Ethereum is about 120 million. This amount is about 6 times the total amount of Bitcoin, and the current price of Ethereum is less than 3% of Bitcoin. From this we can see that the price of Ethereum still has a lot of room to rise in the future.
A very significant event has recently occurred in the development of Ethereum: the development route of Ethereum 2.0 will undergo major adjustments, the original shard development will be simplified, and the rollup-based expansion plan will be implemented first.
This scheme currently seems very feasible, and it is optimistic that it may even be realized by the end of 2021. Once this scheme is implemented, Ethereum’s TPS can reach 100,000 per second, which has been able to meet the design goals of Ethereum 2.0 and solve the congestion problem of Ethereum.
This greatly advances the progress of Ethereum 2.0 and greatly reduces the difficulty of development.
If this new solution can really progress as expected, and Ethereum can reach 100,000 TPS by the end of next year, then there will only be one year left for the survival of other existing public chains.
There is no doubt that this will subvert the entire public chain ecology.
Today there is another important news: Grayscale Ethereum Trust Fund (ETHE) has officially obtained the approval of the US Securities Regulatory Commission, becoming the first publicly listed ETH investment product in the United States. The fund’s stock will be listed on the OTCQX in the United States under the symbol ETHE.
This means that more traders can buy Ethereum through normal compliance channels, which will open another door for OTC funds to enter Ethereum in the long run.
All these news are very good for Ethereum, and they are long-term and deep. Regarding this, as far as we investors are concerned, apart from holding the Ethereum in hand and buying it when the price is low, I still suggest not to miss other public chains. They have not much time left, whether they admit it or not, they are on their way to zero.