CoinDesk Report:
Author: 636Marx
Solana is regarded by many former Ethereum supporters as its biggest challenger. In the past 24 hours, SOL coin has seen the highest increase among the top ten cryptocurrencies.
The current trend of Solana aligns closely with Bitcoin, and the community generally believes that SOL will easily surpass its historical high of $260 after Trump’s victory. The support rate on polymarket is 60.7% for Harris and only 39.4% for Harris.
However, Ethereum has been performing poorly this year, with ETH/BTC hitting a new low of 0.03773BTC in 2024. It has dropped by 38.3% from 0.06117 on January 12 and by 69.5% from its all-time high of 0.1238. As the second largest cryptocurrency after Bitcoin and the largest blockchain platform by market capitalization, I have the following observations, so I remain optimistic about the long-term prospects of Ethereum.
Upgrade of Ethereum’s Verge: Democratizing Node Operation
Verge is one of the upcoming key upgrades for Ethereum and is a core part of its long-term strategy with significant impact on decentralization. Ethereum co-founder Vitalik describes it as a step towards “Ethereum 2.0”. Verge aims to significantly reduce the computational resources required for running nodes.
Blockchain nodes store complete copies of the blockchain and assist in transaction verification. Traditionally, running Ethereum nodes requires a large amount of hardware resources. However, the Verge upgrade aims to significantly reduce these requirements, making it possible to run nodes on lightweight devices such as smartphones and smartwatches.
The Importance of this Upgrade
This upgrade could fundamentally change the way people interact with Ethereum, as it decentralizes Ethereum further by reducing the hardware and energy requirements for node operation. Decentralization is crucial for blockchain security and resistance to censorship, as a more decentralized network is inherently more resistant to attacks and manipulation.
Imagine a world where millions of people run Ethereum nodes on their smartphones. This will not only enhance network security but also integrate Ethereum more deeply into everyday life. Running nodes on mobile devices can facilitate user participation in network governance and transaction verification, all of which can be done on personal devices.
This progress brings Ethereum closer to its vision of becoming a “world computer” that supports decentralized applications (dApps) on a truly global scale.
Vietnam’s Blockchain Initiative: 20 New Brands and a National Network
As Ethereum makes technological advancements, countries around the world are embracing blockchain technology. Vietnam has emerged as a pioneer, recently announcing plans to launch a national blockchain network and nurture 20 new blockchain-based brands.
This initiative showcases Vietnam’s strategic commitment to blockchain innovation. The government is collaborating with private entities to develop a network that supports diverse applications in sectors such as finance, logistics, education, and healthcare.
Vietnam’s Blockchain Strategy
Vietnam’s blockchain ambition goes beyond adopting new technology – their goal is to position the country as a leader in the digital economy. By nurturing domestic blockchain projects and establishing a national network, Vietnam aims to become a hub for blockchain innovation in Asia.
This focus is particularly relevant as blockchain technology permeates various industries worldwide. Vietnam’s approach reflects a broader trend of countries seeking to leverage decentralized systems to achieve economic and governance objectives.
Furthermore, given the global interest in blockchain technology, Vietnam’s national blockchain network could attract significant foreign investment. With the right infrastructure, Vietnam has the potential to become a key participant in the global blockchain ecosystem, following in the footsteps of countries like Estonia and Switzerland in Europe.
Ethereum’s Market Performance Relative to Bitcoin
Despite positive developments in Ethereum’s technology and adoption, its value has been declining relative to Bitcoin in recent months. Altcoin Daily, a YouTube channel with millions of followers, recently expressed continued support for Ethereum on social media, garnering a large following. Some followers misinterpreted the video, believing that the girl was attacked for supporting Ethereum.
The Factors Behind Ethereum’s Market Position
The decline of Ethereum relative to Bitcoin is attributed to various factors. Bitcoin is often seen as the “digital gold” of the cryptocurrency world, believed to be more resistant to regulation and technological risks than other cryptocurrencies. Meanwhile, Ethereum continues to develop its platform and implement significant upgrades like Verge, which introduces some uncertainty for investors.
Bitcoin’s dominance is partly due to its simpler use case as a decentralized currency. Ethereum’s broader ecosystem of dApps, DeFi (decentralized finance), and NFTs (non-fungible tokens) means it faces competition not only from Bitcoin but also from other blockchains like Solana, Avalanche, and Binance Smart Chain.
Current market dynamics also play a significant role, with many institutional investors seeking safer assets amid rising interest rates and global economic uncertainty. Due to its limited supply and established market position, Bitcoin has become the preferred choice.
Arguments for Ethereum’s Long-Term Potential
Despite recent price declines relative to Bitcoin, the long-term outlook for Ethereum remains positive. The following factors support this view:
1. Ethereum’s Network Effects
Ethereum has the most developed ecosystem of any blockchain, hosting thousands of dApps that serve millions of users and process billions of dollars in transactions daily. This network effect is difficult to replicate. While other blockchains like Solana and Avalanche are making progress, none have matched Ethereum’s level of adoption.
2. DeFi and NFT Leadership
Ethereum continues to be a leader in DeFi and NFTs, and despite recent market fluctuations, there is still strong potential demand for decentralized financial products and digital collectibles. Ethereum’s infrastructure continues to support these industries, and as these markets mature, Ethereum’s value may appreciate.
3. Mergers and Future Upgrades
Ethereum recently completed the “merge” from proof-of-work to proof-of-stake consensus. This transition significantly reduces Ethereum’s energy consumption and paves the way for future upgrades, including sharding and Verge. These improvements will enhance Ethereum’s scalability, security, and efficiency, driving future adoption and potentially increasing its value.
In particular, the Verge upgrade highlights Ethereum’s commitment to decentralization and accessibility. By enabling mobile devices to run nodes, Ethereum will expand its reach, increase participation, and further strengthen network security.
4. Institutional Adoption
Ethereum is gaining favor among institutional investors, particularly in decentralized finance and enterprise solutions. Major companies like JPMorgan and Visa, as well as some governments, are exploring Ethereum-based projects. With growing institutional adoption, Ethereum’s utility and value may significantly increase.
5. Layer 2 Scaling Solutions
While Ethereum has faced criticism for high transaction fees and slow processing times, layer 2 scaling solutions like Optimism and Arbitrum are addressing these issues. These solutions make interactions with Ethereum more cost-effective and efficient, making the network more accessible to a wider audience. As layer 2 technology matures, Ethereum will be able to accommodate more users and transactions, further enhancing its long-term prospects.
In conclusion, Ethereum’s price weakness reflects broader market dynamics rather than inherent weaknesses. Ethereum continues to innovate, with upgrades like Verge expanding its capabilities and accessibility. As the most advanced blockchain platform, Ethereum is well-positioned to capitalize on these developments.
Despite short-term market fluctuations, the long-term outlook for Ethereum remains optimistic. Its technological advancements, established network, and increasing institutional adoption will drive its future value.
In the future, Ethereum is poised to emerge as a key player.
