Will Ethereum 2.0 surpass Bitcoin?

Ethereum is pretty cool. But the problem is that it is very complicated.

I participated in Ethereum in 2016. This is one of the best decisions I have ever made. It not only brought me huge profits, but also a huge advantage to my career. Being able to explain Ethereum in simple language is a superpower. I hope you can master this power so that you can make good use of it.

Bitcoin is easy to understand: slow-moving digital gold. When people say that Bitcoin is a currency, or that it is not used for shopping, it means that they don’t understand it. Bitcoin is a long-term savings account that relies on scarcity (there are only 21 million Bitcoins) and protects it from inflation with codes. That’s it.

Ethereum is much harder to understand. It has thousands of use cases. This is why if you start to learn Ethereum and its role, you can do it well. Every day I can learn some new things about Ethereum. It is a beast.

Why should you care about Ethereum?

It is the second largest cryptocurrency and it was launched in 2015.

The network effect of Ethereum is impressive. Network effects helped the previous generation of technology companies make a lot of money. The next generation of technology will be blockchain-driven, decentralized technology, such as Ethereum.

Some experts even stated that the scale and price of Ethereum will surpass Bitcoin. This is why you need to pay attention to Ethereum.

What is Ethereum? (For ordinary people)

-Ethereum is a worldwide computer platform serving decentralized applications.

-Ethereum is becoming more transaction and settlement layer.

-Ethereum introduced programmable currency through smart contracts.

-Vincent Tabora

These are the three things that Ethereum is famous for. It can do many things. Many cryptocurrencies are built on Ethereum, further increasing its utility and value. Ethereum helped realize DeFi (Decentralized Finance).

DeFi is also easy to understand. DeFi removes the middlemen from the existing financial products we have used, thereby reducing costs.

Trust on the Internet is broken.

Ethereum is a way to repair ownership, using code to verify, rather than profiting from the existing trust system.

Imagine that in this world, banks, stock exchanges, and credit card companies (Visa, Mastercard, Amex) have all been replaced. This is what Ethereum has begun to slowly realize. The issue of trust is a bigger issue than storing value and protecting it from inflation. This is why Ethereum has the potential to be much more valuable than Bitcoin in the long term.

This is a signal that determines whether the price of Ethereum surpasses Bitcoin

Raoul Pal is a financial legend. He recently went from investing most of his funds in Bitcoin to investing part of his funds in Ethereum.

Raoul came up with a simple way to measure the potential future prices of Bitcoin and Ethereum. Both of these cryptocurrencies have a concept called an address. An address is like a user’s account.

Raoul has shown that as the number of user accounts increases-just like Facebook, Twitter, Uber, Netflix, etc.-the price of each coin and the total value of the network will also rise. (I say the network because Ethereum and Bitcoin are not companies-another cool feature of these two technologies. Ethereum is built by thousands of developers all over the world who have contributed to this project Own time and integrate their resources.)

This phenomenon is called Metcalfe’s Law. Metcalfe’s law has been used in the financial world for many years. What you need to know is that this law helps explain how a network grows, and it helps you value a network like Ethereum.

From Raoul’s analysis, it can be seen that Ethereum is “more viral than Bitcoin.”

BTC=ETH. In fact. Different assets, different ecosystems, same applications, same behavioral economics = the same but different…–Raoul Pal

Ethereum 2.0 increases opportunities

Ethereum is already exciting. Then the Ethereum developers decided to announce Ethereum 2.0. This change is not easy to understand, especially if you are not working in a technical field.

In essence, Ethereum 2.0 makes it more like Bitcoin. This should surprise you. Bitcoin is magical because of its scarcity and deflation. Ethereum 2.0 introduced the following:

1. “Staking”

Anyone can verify Ethereum transactions. Most of you will not do this when you read this story. Transactions need to be verified by the Ethereum network to create trust. By using the Ethereum network to create trust, you don’t need a middleman to do this.

The old method of verifying Ethereum transactions is called “Proof of Work” (PoW). Computers owned by humans will solve mathematical problems and consume electricity in the process (similar to how Bitcoin works). With climate change becoming a hot topic, power consumption is seen as a bad thing.

With staking, if you want to verify the transaction, all you need to do is deposit and lock 32 ETH. When you help verify Ethereum transactions, you can earn Ethereum. What does it matter?

Staking means that those who verify and protect the network must have skins in the game. The skin in the game makes the people connected to the network and the network itself more valuable.

Staking means that the available Ethereum will also be reduced, because part of the supply will be locked by those who choose to pledge. Less Ethereum means more scarcity. Scarcity is a feature that makes Bitcoin extremely valuable. Over time, it will have a similar impact on Ethereum.

2. “Sharding” (Sharding)

Sharding in Ethereum 2.0 is coming soon. For us ordinary people, this means that the Ethereum network will be divided into 18 small parts. This will help increase the speed of the network. Sharding will allow the network to process more transactions per second.

A faster Ethereum network will further increase its value.

3. The magic of’Token destruction’ on the price of Ethereum

Recently, transaction fees on Ethereum have been very high. Ethereum 2.0 has made a fundamental change. Previously, those who verified transactions could set transaction fee prices. This makes greed and overcharging possible.

With the advent of Ethereum 2.0, the price of verification transactions is set by the network and adjusted according to network activity. This change prevents greedy people from taking advantage of these normal people.

Pay close attention to the next part. This update also enabled Token destruction. Token destruction refers to the destruction of a certain percentage of the transaction fees paid to those verification networks. This will reduce the overall supply of Ethereum over time and further realize the glorious scarcity similar to Bitcoin.

Simply put: As network usage increases, the supply of ETH will decrease.

This means that as Ethereum is adopted by more and more people, the number of Ethereum will decrease. When the number of Ethereum decreases and demand increases, the price of each Ethereum will rise.

Token destruction is deflation, the opposite of inflation. The value of the dollar will decline over time, because more dollars are created out of thin air. Ethereum is programmed to be deflationary-meaning that the value is rising rather than falling like the dollar.

Ethereum 2.0 summary

faster.

Cheaper Ethereum transactions.

safer.

Be able to carry more use cases (who is invited to fix social media) that require technical solutions (applications/software) to solve the trust problem.

It is easier to understand and use.

Provide in-game skins for those who choose to verify Ethereum transactions.

Provide a better way for people to make money from building and working on Ethereum.

Huge change: Over time, Ethereum has become increasingly scarce.

Should you invest in Ethereum?

Only you can answer this question according to your own situation. The stock doesn’t feel right to me now. I don’t like buying at the highest price in history. So I am sure I will buy more Ethereum. I use the 80/20 distribution rule for Bitcoin and Ethereum. If I invest $1,000, then $800 will go to Bitcoin and $200 will go to Ethereum.

There is no doubt that Ethereum will play a huge role in our lives. I think it is worth a small investment, but only if you have the money to be prepared to take risks.

Ethereum is quietly changing the world

The current version of the Internet has broken down. It is centralized, open, and easily manipulated, just like the abuse of our trust by companies such as Facebook that we have seen in the past two years.

The future of the Internet will not be owned by a few large technology companies, and the future of the Internet will once again be owned by users. Users will have their own data and destiny.

Web 2.0 is a readable and writable platform.

Web 3.0 is a readable, writable, and ownable platform.

Ethereum has realized Web 3.0, so it is valuable and will grow rapidly after Bitcoin. Ethereum may become a pipeline for all applications in the future.

In the war against the early search engines, Google was the sleeping lion. In the war against the reconstruction of traditional finance, Ethereum looks like a sleeping lion. Bitcoin is an excellent idea. It solves the problem of value storage and gave birth to digital gold.

Bitcoin is 12 years old and Ethereum is 5.5 years old. Ethereum still has a long way to go and it has just started. The scale of Bitcoin is huge. The potential of Ethereum is even greater. Let me tell you why in one sentence:

Ethereum has the ability to reshape the global financial system, become a platform for all decentralized applications in the future, and solve the ownership problem once and for all.

These three points are that Ethereum has become a sleeping lion and the reason for its rapid growth after Bitcoin. Ethereum 2.0 will make Ethereum more scarce, and bring simplified new features to make it imitate some of the positive factors of Bitcoin.

You can benefit from the Ethereum revolution through your own research and incredible patience. The future is built on Ethereum in front of you. Dare to pay attention to it.