(Price trend of 20 19 Ethereum)
In this year, the price of Bitcoin tripled from $3,500 at the beginning of the year to more than $7,000 now. In contrast, today's Ethereum is very similar to Bitcoin in 20 15 years.
(20 15 bitcoin price trend)
That year, Bitcoin finally got out of the way near the end of the year, and for most of that year, its performance was mediocre. Although there are ups and downs, the price remains at the same level.
So, will Ethereum go out of the market like Bitcoin 20 16 in 2020?
These two years are somewhat similar, both of which are "waist cuts", both of which are two years away from the last high point, and both of which are expected to get out of the skyrocketing market.
Moreover, the current Ethereum still has an illusion similar to 20 15 bitcoin. Just like Bitcoin experienced the failure of payment demand in the past, the IC0 project on the Ethereum became a burden during the bear market, and the project party could sell the ETH obtained from IC0 without any worries.
Like Bitcoin in Satoshi Nakamoto, V's vision of network scalability has been stagnant for years instead of months, but in other fields, they are becoming more and more interesting.
First of all, the outside is the blockchain and the inside is Defi.
Blockchain appeared in 20 14, but it rose at a faster speed in 20 16, which is also a big reason why Bitcoin can take off in 20 17.
The launch of Ethereum may also promote Bitcoin, because initially you need to buy BTC to get ETH.
However, because Ethereum is Turing-complete, it does not need a brand-new blockchain network to realize new inventions. On the contrary, anything that can be coded can be coded with ETH, including some primitive but fully automated banks.
For example, one case is DAI, a stable currency issued by MakerDAO, a decentralized bank, which has provided 10 times the bank's current interest rate (generally speaking, the bank's current interest rate is about 3%).
It can be said that traditional banks lack advantages in this respect, because they have costs such as offices and employees who want generous bonuses, and these costs are obviously paid by bank users. And these have been replaced by extremely cheap codes in Ethereum.
At present, this invention is still very young and has great room for development. The concept of Defi (decentralized finance) has been generally proved to be feasible.
Second, from Defi to technological revolution.
Some smart contracts are very complicated. For example, to create a A Dai contract, you must sell ETH, manage collateral, hedging and arbitrage, and create a code price management strategy. Basically, you must be your own bank.
But from the end user's point of view, you don't have to worry so much. You just need to know whether the contract has been hacked, and if not, how long has it been running?
Although this is not a perfect method to measure safety, it is relatively an effective method to quantify risk with technical level. Don't worry about the management of collateral, just exchange ETH for it, and you can earn savings.
Suppose you have a deposit of more than $654.38 million. You think the stock price may be too high, or you think the dollar will strengthen, or you just want to have some quick and convenient financial savings.
In the last case, the solution is to put it in the bank for life, but if you really do this, you will lose money because of inflation, because the bank interest rate in many places is extremely low, and the interest you can give to the current savings account is basically 0%.
But if you put it in a decentralized banking system like Dai, you can get 4% savings interest. All everyone has to do is buy ETH first, and then change it.
Let's imagine that if more people do this, it will indirectly push up the price of Ethereum. Therefore, it is wise to keep a part of ETH instead of turning it into DAI. Through this example, you may be able to imagine the future development direction of Ethereum.
Third, will ETH rise in 2020?
If you regard Tai Fang as the gateway to a new field of DEFI, its value may be underestimated at present.
Just as bulls are high-spirited and will be divorced from reality, so will bears. Bear market can often give many reasons for decline, but at present, we don't know what negative things will happen in the future of Ethereum except for some cliché s.
Yes, the upgrade is always delayed, because it is too complicated, or for other reasons, you are not even sure whether it will be released in the end.
Yes, like bitcoin developers, the developers of Ethereum will become arrogant because of poor communication skills and contempt for "investors", and some people have even left their jobs, thus slowing down the progress.
Ethereum lacks a clear monetary policy-nevertheless, Ethereum's goal is to reduce the inflation rate to near zero.
The IC0 project has been sold and sold, but many projects have no results, and the progress has been delayed. It is not an exaggeration to say that they are semi-dispersed.
In the bear market in the past two years, these shortcomings have surfaced, and there are more than these, but in the end, the price of Ethereum is still 130 USD.
This may mean that all the negative factors have been digested, and the market still thinks, even stubbornly, that it is worth at least 130 USD.
If there is no further decline, it probably means that it must rise, because during the bear market, many potential positive factors and upgrading development have been ignored.
Although Defi seems to be only a field, it can automate more financial services slowly and gradually through a large number of applications, and finally promote the development of financial entities such as banks.
In addition, the delay in upgrading has been reflected in the price, although it is not clear whether other established factors have also been reflected in the price.
For example, does the market really believe that the inflation rate of Ethereum will drop to near zero or even negative?
Has the potential demand for interest through PoS been reflected in the price of digital assets? Once PoS exits the market, what will happen to the locked ETH? What's the new scheme to convert ETH 1.x (the name of the existing Ethernet platform protocol upgrade set) into POS fragmentation mechanism?
We can list many, many problems, but you should know that Ethereum was declared dead early last year, but it has come to this day.
So it still has a chance to rise again, because it has achieved many goals, and there are more goals to be achieved. At the same time, many new concepts (such as Defi) have been created, some of which have already landed and some have just started.
As for valuation, if we only talk about one aspect, such as replacing some banking services, even if there is only a 20% chance, even if we only get a market share of 1%, it will still be a trillion dollars.
As Darwin once said: "The species that can survive in the end is not the strongest or the smartest, but the most adaptable to change."