Vitalik Buterin’s Observations
Last year, Ethereum had seen some major rise in the price, but, 2018 is increasingly proving to be a year of regulations leading to adverse effects on the cryptocurrency market. According to the founder of the MIT Digital Currency Initiative, Jeremy Rubin, the value of ETH may soon significantly drop.
In September 2018, the price of Ethereum (ETH) had experienced some significant drops and currently, the crypto-coin shows variations within the $200 to $250 mark over the last week. It was in early September 2018 that Vitalik Buterin, the founder of Ethereum had proclaimed that the explosive growth in the cryptocurrency industry is coming to an end. In a statement to Bloomberg, Buterin’s words had solidified his belief about the end of an explosive growth along with the fall in the value of ETH.
Vitalik Buterin had said, “If you talk to the average educated person at this point, they probably have heard of blockchain at least once. There isn’t an opportunity for yet another 1,000-times growth in anything in the space anymore. That strategy is getting close to hitting a dead end.”
It is true that awareness of the blockchain technology is increasing day-by-day with reports from the American Institute of Certified Accountants (AICPA) revealing that above 50 percent of the American populous have heard about cryptocurrencies. According to Buterin, the fate of cryptocurrencies is mostly dependant on awareness and adoption in real-world applications. Even though blockchain technology and cryptocurrencies are gaining attention from the consumers, the cryptocurrency market is nearing “a dead end”.
Reactions to Vitalik Buterin’s Statements
Vitalik Buterin’s negative statements had an immediate effect on the ETH price action with a drop in price to approximately $188 on that Sunday. As per coinmarketcap.com, the Open price on 13th September had hit a low of approximately $183.68. The value of ETH was further affected as investors had started selling the crypto-coin in the fear of “ICO dump” and to minimize losses.
Buterin believes that the value of ETH can improve only if the Ethereum blockchain can be implemented in real-world applications rather than marketing strategies. The founder also stated that Ethereum is simply not ready to support large-scale consumer interest.
Issues that Prevent Real-World Application of Ethereum Blockchain
As per Vitalik Buterin, scalability is a central issue that prevents the Ethereum project to progress. Currently, the Ethereum network is finding it difficult to support dApps at a large scale. Many other decentralized applications, on the other hand, have already presented a strong use case and a working proof of concept. The Ethereum network also had to face the consequences of a certain cryptocurrency exchange earlier this year. FCoin had congested the Ethereum blockchain with paltry transactions according to the MyCrypto wallet.
The Ethereum 2.0 Roadmap is designed to introduce second-layer scaling solutions with a PoS consensus system. It is expected to increase the overall ETH transaction throughput speed and also improve the productivity of Plasma and Sharding scalability solutions. The foundation of the Ethereum blockchain has a lot of space for improvement and can adapt quite fast. The ETH investors can look forward to this and hold onto the coins.