Will the Ethereum blockchain be a component of the network of tomorrow?

Many developers are turning to the Ethereum blockchain to design new applications. It could be a component of the so-called Web 3.0 or the Semantic Web, where a series of decentralized services could one day challenge GAFAM’s offerings.

Ethereum: The blockchain is widely used by developers

According to Sandeep Nilewal, co-founder of Polygon, “60-70% of the industry is running on Ethereum. It is a very difficult topic.”. As a result, the price of the Ethereum coin, better known as Ether (ETH) has risen 9 times this year. All usable and circulating tokens have a value of $350 billion as of October 1, 2021. For comparison, this is equivalent to 40% of the value of all bitcoins worth over $800 billion.

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Since 2015, the number of Ethereum tokens has increased steadily, and this is in a relatively stable manner. However, at the beginning of this year, with the increase in the price of the token, Ethereum entered a new phase: the number of tokens in circulation would increase much more slowly than in the past, or even decrease. Then we invoke the possibility that tokens will become more expensive than bitcoin because they will be “scarce” in the market.

A graph representing the fluctuation of the number of symbols (in millions) over time.

A graph representing the fluctuation of the number of symbols (in millions) over time. Source: Financial Times.

Last September, the token supply was already reduced. Some codes that were previously valid are now considered unusable. A second phase of reduction could begin later this year or early next year.

One of the reasons for the high price of Ether is the use of a very specific token called NFT (non-fungible token or non-fungible token). Only one token is generated at a time and cannot be replaced. NFT is associated with a physical object or digital artwork (photo, photograph, video, audio file, etc.) which is then sold as a digital good. Besides NFTs, we also note the emergence of the DeFi (for decentralized finance) marketplace. By allowing the creation of a wide range of financial services, it provides the possibility for cryptocurrency holders to either borrow or lend according to their assets. These two new markets contribute significantly to the emergence of the blockchain.

A series of changes to improve the capabilities of Ethereum

At the same time, Ethereum embarked on a series of changes to its own network. One line of work would consist of “sharing” the network by splitting it up into 64 more “restricted” ones, but all linked to registers thus reducing stress on each node in the network. This in particular would prevent the network from validating each transaction one by one.

Another amendment aimed at reducing the energy consumption of its currency by reducing that necessary for auditors. It’s moving away from proof of work to proof of stake. While the former harnesses as much energy as a medium-sized country, the latter consumes up to a small town of 2,000 homes.

Vitalik Buterin also mentions “The ability to make other changes to the underlying protocol to reduce the load on nodes”. As he explains his optimism: “Within two years, some of these initiatives will be implemented and Ethereum will see a significant increase in its capabilities.”.

Content creator’s desire to adapt to users’ needs

Unlike Bitcoin, Ethereum is not entirely dependent on a clear monetary vision or with a higher cap on the tokens that can be created initially. Identifies Vitalik Buterin, Creator of Ethereum “It will adapt to all user needs”. This announcement opens up the possibility of further changes to how tokens are generated and therefore the long-term supply of Ether.

According to specialists, the hope behind this price hike is that Ethereum will be a central component of Web 3.0. “Used by a large number of developers who are already creating apps, it makes it an important tool for coding developers like JavaScript among web developers” According to Sandeep Naelwal.

To attract more developers, most of the new blockchains allow them to run their applications in “Ethereum virtual machines.” They allow creating bridges to the Ethereum blockchain. Some big names are also adapting their offerings, such as Amazon Web Services which has adapted its Amazon Managed Blockchain service to Ethereum.

Using the blockchain may be the best weapon against attacks on our personal data. The decline in the number of tokens, the arrival of NFT and DeFi, and the changes related to user needs and energy consumption are all reasons to believe that the Ethereum blockchain will be at the center of the web of tomorrow. , web 3.0.

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