This article discusses Ethereum’s supply-demand analysis, scarcity, and deflationary aspect. If you’re looking for a way to invest in the crypto market, this article is for you. Ethereum is cheaper than Bitcoin, so it’s an excellent option for long-term investors. Also, it could eventually surpass Bitcoin in market cap by 2021. Compared to Bitcoin, Ether is cheaper and could have the highest long-term appreciation.
Ethereum’s supply-demand analysis
The most important thing to consider when looking at the long-term trend of Ethereum’s supply-demand analysis is its price. The price of Ether has a direct relationship with the amount of ETH that is available on the market. However, its price has a tangential relationship with the number of active ETH addresses. If you are interested in making a market investment, you should pay attention to the long-term trend of the cryptocurrency’s supply.
As the number of users grows, so does the amount of disk space needed to run the Ethereum client. The “best” version of Ethereum has a significant impact on the environment, and the newest development, Ethereum 2.0, will make many important changes to the protocol and security model. Ethereum 2.0 will change the security model from a proof-of-work to a proof-of-stake model. This shift from proof-of-work to a proof-of-stake model will require significant change to the protocol.
Despite this, cryptocurrencies only become valuable due to community buy-in. Because of this, the Ethereum community is eagerly waiting for the blockchain platform to expand its capacity in the long-term. While its price is still low, it is expected to appreciate over the next few years. Its base layer, which is composed of dozens of shard chains, is complex and may not be appealing to large pools of capital. Bitcoin, on the other hand, has a simple, uncomplicated and complete verifiable protocol.
Unlike Bitcoin, Ethereum has no fixed supply. However, the issuance schedule for ether has been programmed to increase by 2 ETH per block. The Ethereum developers plan to further decrease ether issuance in the future. Since there is no fixed cap for ether, Ethereum may eventually introduce a fee-burning mechanism to reduce its issuance. However, the current issuance schedule is far from stable.
A recent study shows that the Ethereum supply has been shrinking since the August 2021 upgrade. This trend is in line with the demand-supply dynamics that the blockchain is expected to experience after EIP 1559’s launch. As the circulating supply continues to decrease, the price of ether is likely to follow suit. The price of ether may increase dramatically in a few years when demand increases. But it remains to be seen how the supply-demand dynamics will play out in the future.
Its deflationary aspect
While ETH and Bitcoin both have deflationary characteristics, Ethereum is more widely used because of its deflationary nature. Unlike Bitcoin, which has a finite supply of 21 million coins, Ethereum will burn excess Ether instead of sending it to validators. While Ethereum will eventually become the world’s most defensive crypto, its true use case will continue to be to secure settlements and transactions. Ethereum’s future will be in defending important blockchain networks.
The blockchains behind both currencies are decentralized and governed by consensus rules. Both use proof-of-work consensus to make a transaction. To have a valid transaction, at least 51% of network nodes must agree that the transaction is legitimate. Bitcoin’s price will not rise if more Ether is stakingd, while Ethereum’s price will continue to increase over time.
While cryptocurrencies have varying degrees of intrinsic value, most of the most important aspects of a digital currency are scarcity and broader technological use. This is what gives a digital currency its intrinsic value. As Ethereum is gaining market attention, its utility increases as well. Its dApps and smart contracts enable developers to create new applications and services. Because of this, its intrinsic value will continue to grow over time.
While Bitcoin has more intangible value, it is more volatile. If a government takes away benefits from users, coins are hampered by fraudulent activity, or a better alternative is created, bitcoin’s price may fall to zero. Nevertheless, it is unlikely that Bitcoin will experience a deflationary crash in the near future. Moreover, if the value of Bitcoin drops, it will only increase again.
Its scalability
In a recent article on Medium, I compared the scalability of Ethereum to Bitcoin. I’ve found that Ethereum’s scalability has more intrinsic value than Bitcoin’s, and in the end, I’d bet that it does. After all, the latter is much more valuable because of its scalability than the former. However, the debate still remains.
First and foremost, Ethereum’s scalability is significantly faster than Bitcoin. When compared to bitcoin, the block time for Ethereum is 10 to 15 seconds, while that for bitcoin is ten minutes. It only takes five minutes to process a single ether transaction, whereas a single bitcoin transaction can take as long as 40 minutes. Ultimately, these differences make Ethereum a much better and more environmentally responsible option than bitcoin.
In addition to being more secure, Ethereum has more utility than Bitcoin. Its decentralized blockchain network allows it to execute smart contracts. These contracts, which are designed to be trusted and verified, are a major source of its intrinsic value. Ethereum’s scalability also makes it more useful in the long run. As Ethereum continues to gain traction in the cryptocurrency space, it will eventually outpace Bitcoin’s price.
Bitcoin has a limited supply of 21 million coins, but Ethereum has an unlimited supply. It has a mining process that caps the amount of ether distributed each year, which eliminates the perceived scarcity. Ether’s supply grows through a disinflationary process as the network grows. This mechanism is constantly being adjusted as the network matures. The future is uncertain. The question of whether or not scalability is more important than Bitcoin’s intrinsic value is worth more than its price.
Its scarcity
There’s a common misconception that bitcoin and other crypto assets have no intrinsic value. The truth is, however, that both cryptos have scarcity, albeit somewhat differently. When investing in a piece of land, for instance, an investor is interested in knowing how many crops it can grow, and how much rent tenants can expect to pay. The scarcity of these assets is part of what gives them their value.
Although cryptocurrencies like Bitcoin and Ethereum have many benefits for investors, their scarcity can actually make them more valuable as an investment. For instance, Bitcoin has limited production, with only 21 million circulating at any given time. This makes it much more attractive to investors, as they can send millions of dollars for a small fee. Ethereum, on the other hand, has many real-world uses and is not tied to a centralized network.
While fiat currencies like the US dollar and the UK pound are not as scarce as Bitcoin, they are still highly susceptible to inflation. In addition to being highly valuable, these currencies are also more difficult to counterfeit. Even if you could, you would have to “double-spend” one bitcoin to make a duplicate record. Despite this, if a user spends two bitcoins in a row, the price will fall, reducing the value of the currency.
Although Bitcoin is more popular than Ethereum because of its scarcity, the latter is still more risky and has a more compelling inherent use case. Unlike Bitcoin, Ethereum’s price does not depend on its scarcity, which means it will fluctuate with the economy. A coin’s value is based on a number of different factors, including the amount of DApps and ecosystem users. These factors will fluctuate with natural economic trends, and the presence of competing platforms will affect the value of the cryptocurrency.
While Bitcoin has a long history of rising and falling prices, the rise of the Bitcoin price has given the cryptocurrency a solid narrative and increasing popularity in the process. This narrative has been reinforced by the exponential growth of the Bitcoin price over the past four years. While this has led to an increase in Bitcoin’s price, it has also weakened the currency’s proportionality. And, unlike gold, there’s no global belief that Bitcoin is a usable asset.
The cryptocurrency market has been tumbling for a year, but Bitcoin is down 80% from its peak a year ago. It is not yet at peak crypto, and there is still a way to go before the market reaches a nirvana of wealth and usage. Perhaps the best usecases of crypto currencies are IOTA and ONION. However, the question of practicality still hangs over the entire crypto space.
Bitcoin
You’ve probably heard about Bitcoin, but are you familiar with its practical use? Bitcoin is an international payment system and has several advantages, from eliminating currency conversion to anonymous payment methods. It can also help you establish a will and keep track of national voting records. Using Bitcoin as a payment method has several benefits, including minimizing the risks associated with identity theft and data breaches. In addition to its many benefits, bitcoin has a small but steady increase in popularity among individuals, businesses, and governments around the world.
The cryptocurrency gained popularity after it was made widely available on exchanges in 2010. As of June 2017, Bitcoin’s value had reached $65,000, a record high since it had fallen to below $30,000 earlier that year. The digital currency has penetrated other areas of mainstream business and culture. It has also been adopted as legal tender in El Salvador, despite its volatility and uncertainty. But is Bitcoin a good investment? The debate over its use and its value continues.
A digital wallet is used to store bitcoins. These wallets can be on a computer or in the cloud. They’re similar to a virtual bank account and allow users to send and receive bitcoins, purchase goods, and save them for later use. However, they’re not FDIC insured and may have been hacked. Some companies that host bitcoin wallets have been hacked, and the clients’ money has disappeared. Users can also accidentally delete their digital wallet, and viruses can destroy bitcoins.
Unlike traditional currencies, Bitcoin offers businesses many benefits that fiat currency doesn’t. One of those benefits is that it is a programmable currency. Using it to make purchases allows businesses to create real-time revenue sharing, increase transparency, and simplify back-office reconciliation. And with the rise of cryptocurrencies, more businesses are finding that important clients and vendors want to use crypto as a balancing asset to cash. Cash may depreciate in value over time due to inflation and other factors, while crypto has a clear volatility risk.
Another benefit of Bitcoin is its anonymity. Unlike cash, you can buy bitcoins from any exchange without revealing your identity. Unlike cash, you can’t trace bitcoin transactions back to the buyers or sellers. Even if you lose your wallet, you can’t dispute your transaction. And, unlike cash, there’s no oversight for this currency. This anonymity makes it ideal for illegal activities. However, some countries are considering regulating bitcoin to prevent its widespread adoption and use.
IOTA
Despite its infancy, cryptocurrencies are gaining widespread adoption as a form of investment and as a means of exchange. Cryptocurrencies can be used to transfer money securely between currency owners without involving traditional financial institutions. In fact, they are designed to work like money, a function that traditional currencies are not capable of achieving. In fact, fiat currencies are already eroding and face the threat of government seizure. For instance, Greece has a 45% income tax rate and is seizing over 900 bank accounts every day.
While cryptocurrencies have a decentralized nature and are not regulated by any central authority, some argue that they can be used as a tax avoidance tool. Because they are based on blockchain technology, their value is not affected by a country’s political whims or monetary policy. While this can be advantageous to some, it can also be a disadvantage. Despite the benefits, cryptocurrencies are still considered assets and therefore subject to capital gains taxes.
In addition, cryptocurrencies are prone to fraud. It is impossible to ensure the legitimacy of a particular cryptocurrency. The more detail that is included in the prospectus, the better. However, this does not mean that a currency will be a success. Fraudsters can take advantage of this situation, so investors should be very careful when investing. While cryptocurrencies are legal in the U.S., China has banned them. So, the legality of cryptocurrencies depends on the individual country’s regulations.
Bitcoin has many advantages over traditional banking. Most importantly, it is fast and easy to send and receive payments. In fact, the recent $99 million Litecoin (LTC) transaction cost $0.40 in transaction fees. Similarly, a money transfer through a financial institution would have taken several days and even more if the transaction was cross-border. These benefits of cryptocurrency make it the ideal choice for international money transfers.
But if it is truly a currency, then it must be a good store of value. For example, electronic transfers of real currency can take minutes or hours, whereas a cryptocurrency can take hours. And older crypto projects require enormous amounts of computational power and electrical energy. This has sparked criticism and led to new developments. However, the fundamental problem with cryptocurrencies is that the prices fluctuate and are therefore not real currency. To be considered a legitimate currency, it must be a reliable store of value.
Steemit
Before the rise of cryptocurrency, Steemit was a blockchain-based alternative social media site that sought to give power back to the people by rewarding their posts with Steem. The cryptocurrency was also used as a means to reward users for posting original content, and a prominent user of the site was banned for soliciting funds to create conspiracy-theory documents. Unfortunately, the popularity of the site also brought spammy users to the platform. Some of these users merely post low-quality content, while others create dozens of accounts and vote for spammy content. Some of these accounts are actually bots, which generate votes for spammy content.
There are a number of ways to earn money on Steemit, and this can include engaging with other users’ subreddits and tagging your content with relevant tags. While promoting your own content on Steemit, you will have to commit a significant amount of time and money to reap the rewards. This is why it’s crucial to know your niche before you jump in. Moreover, if you’re writing on a specific topic or issue, you’ll be able to attract more followers by tagging your content with appropriate labels.
The UI of Steemit is intuitive and easy to use, similar to other popular social media platforms like Reddit, Quora, and Medium. When you sign up for Steemit, you’ll be required to wait a short period of time until the administrators of the website verify your account. This verification process could take hours or even days. In the meantime, you should be extra careful with your account password. Remember that anything you post on Steemit is on the blockchain, so any mistakes you make can potentially cause damage to your Steem reputation.
The main difference between Steemit and Bitcoin is the amount of time that it takes for the coins to be minted. Steem is not the only cryptocurrency available on the market, and the growth rate is constantly increasing. However, if you have the patience to wait for the coins to rise, Steemit may be the right choice for you. It’s definitely worth checking out if you’re interested in Bitcoin or Ethereum.
Storj
What is Storj and what can it do for the blockchain industry? This decentralized file-storage network combines blockchain technology and cloud-based storage. Users who need online storage can access the network to rent disk space and pay in STORJ tokens on the blockchain. As demand for the network grows, so will the rewards. As a result, Storj has a practical use beyond cryptocurrency. Its uniqueness is in its ability to solve a number of data storage problems.
While Storj is a cryptocurrency that is primarily designed for enterprise use, it also has a practical application. Its decentralized storage model eliminates the need for data centers. It also promises to reduce storage costs by 1/3 by utilizing network edge resources. It is still unclear whether Storj has a practical application beyond the crypto-currency community, but it’s worth trying. It’s definitely worth checking out if you have an idle computer or a high-speed Internet connection.
