What is the Future of the Ethereum Cryptocurrency?

 

Introduction

Apps:

In traditional centralized applications (Apps) we store the data on a computer or central computer. This means that an attack on that central computer or server can cause the total loss of user's information (the most important Apps can have a dozen backup servers). Examples of Apps WhatsApp, YouTube, Meta, Twitter, or Instagram.

Dapps:

Decentralized applications (dApps) are digital programs that exist and run on a network of hundreds or thousands of computers.

 

Ethereum Blockchain:

It is a ledger of transactions made between two or more people:

  • The blockchain ledger runs at the same time between thousands of computers or servers. The Ethereum blockchain has about 20,000 full nodes or servers and more than 400,000 Ethereum 2.0 validators.

  • According to crypto app tracker State of the Dapps, there are more than three thousand dapps currently running on the Ethereum blockchain.

Note: This article is for educational purposes, not investment advice.

Ether (ETH) price in the short term:

Volatility is a concept widely used in economics that measures the variations or fluctuations in the prices of financial assets in each period. In the 30-day period, the price of ETH according to Coinmarketcap:

  • On October 23, 1,317 USD.

  • On November 4, 1,649 USD.

  • 21 November 1,089 USD.

Long-term Ether (ETH) price:

The following graph shows the performance of ETH since its inception:

  • August 2016, the price was 2.8 USD.

  • October 2018, the price was 1,308 USD.

  • March 2020, the price was 138 USD.

November 2022, the price is 1,200 USD.

 

Comparison of an investment in ETH and two well-known cryptocurrencies

To learn how Ethereum (ETH) performs relative to other cryptocurrencies, I have selected two:

  • Bitcoin (BTC) blockchain, it has about 50 Dapps.

  • Ripple (XRP) is a cryptocurrency widely used as a payment or settlement system in real time and for sending remittances used by large banks.

To build this graph, we used the data from Annex A, which has the opening prices of the three cryptocurrencies on the 1st of each month, from July 2019 through October 1, 2022.

We use an example of an investment of 100,000 USD, on July 1 and we buy:

  • 33,333 USD in BTC obtaining 3.08 BTC.

  • 33,333 USD in ETH obtaining 114.16 ETH.

  • 33,333 USD in XRP getting 83,965.17 XRP.

See in annex B, the change in value of the investment when changing the price of each cryptocurrency.

 

Results

  • At the end of one year (July 2020) the investment presents a net loss of 20,204 USD.

  • Upon completing the second year (July 2021) the investment will have multiplied by four.

  • Upon reaching the third year (July 2022), the value of the investment drops to 211,289 USD. However, the 33,333 USD of ETH became 122,031 USD.

 

Final Observation

In the introduction we indicated that there are currently more than 3,000 dapps, working on the Ethereum blockchain, that generate transactions and pay the corresponding commissions, to illustrate this we have selected the payments made in a year by 10 of the most important dapps according to Bitcoin-Market-journal:

Revenues from these ten dapps add up to USD 212 million, so the 3,000 dapps generate a significant amount of revenue that energizes the Ethereum ecosystem. 

 

Annex A

Opening prices of the three cryptocurrencies on the 1st of each month, from July 2019 to October 1, 2022.

 

Annex B

Monthly value of the investment in three cryptocurrencies (the initial amount for the price of each month).

 
Carlos Sampson