Being the world’s second-largest cryptocurrency after Bitcoin, Ethereum still has not received enough public attention. In incompatibility with its potential, It is highly undervalued and offers several features that make it worth considering.
Before investing in cryptocurrencies like ETH or Dogecoin one must be aware of how volatile they are, but even then you shouldn’t ignore the possibilities inherent within Ethereum. In this article, we explore why Ether might be underestimated. If you are planning to invest in Bitcoin, it’s important to find a reliable app like the app trading website to buy and sell your cryptocurrency securely.
Types of Ethereum Networks
The technology works under four types of networks – Public, Private, Testnet, and Whisper network. Each network has its own characteristics. Though the new hybrid network, Whisper is still under process. Let’s take a brief of each of them.
- Public main net – This mainnet has two types – Homestead and Metropolis. Homestead works in enabling smart contract networks. While Metropolis is used to improve efficiency and flexibility.
- Private Mainnet – In this type of network, the membership is controlled and limited to a number of users, to protect the application based on cryptocurrency from malicious activities or fraud.
- Testnet – As the name suggests, Testnet is used by coders to test before applying on the main net. Users who wish to use the testnet can join the network. Testnet is essential for most developers to test their apps, or other services based on blockchain technology.
- Whisper Network – This network was basically developed for private messaging between users in an Ethereum-based app.
These were the main types of networks used in blockchain technology. Now, let’s discuss why Ethereum is overlooked in the cryptocurrency community.
Some Reasons Show That Ethereum is Undervalued
Powering Next-gen Financial Infrastructure
The technology is often lauded for its ability to power dApps and NFTs, but many argue that its true potential lies in decentralized finance (DeFi). With DeFi, users can trade ERC-20 tokens without utilizing a centralized exchange such as Coinbase or Binance. Uniswap’s rise as one of the premier decentralized exchanges serves as an example of Ethereum’s capabilities here. In sum: through Ethereum, we can explore the landscape of investing with cryptocurrencies using trustless methods. Likewise, concepts including lending and lending along with some other economic products may be driven by Ethereum, which sets it different from various other cryptocurrencies.
Upcoming EIP-1559
EIP (Ethereum Improvement Proposals) is generating a lot of buzz lately, particularly around EIP-1559 which could completely revolutionize the network. Currently, users have to pay high fees to get their transactions done within the system and it incentivizes miners at the user’s expense. However, this proposal would mean that fee costs are lower, with most going towards maintaining the network instead – though validators can still receive tips and returns for being part of it as well.
Ethereum’s Versatile Capabilities
Ethereum is much more than just another cryptocurrency. Released in 2015, it aims to deliver programmable internet money with the possibility of creating smart contracts which activate automatically when certain conditions are met on the blockchain. This opens up a plethora of possibilities and uses cases for this revolutionary form of digital currency.
The versatility of this network has made way for new technologies like dApps (decentralized apps), NFTs (non-fungible tokens), and DAOs (decentralized autonomous organizations). With a DAO, individuals can create and run an entire organization without needing to rely on one or two people leading it – all in a completely decentralized manner.
Conversion to Proof of Stake
Why is Etharuem going to have a powerful future that, during the Ethereum 2.0 launching, it will going to apply the technique of proof-of-stake and will take out the energy-intensive proof-of-work technique? Though the exact date of this migration has not been released yet, it is going to definitely set Bitcoin aside from the strong contenders of the cryptocurrency community which is mostly targeted for the mining processes.
Miners will probably get replaced by the validators, with a minimum of thirty-two Ether to verify transactions together with a PoS protocol.
Ahead of the Competition
Other networks like EOS, Tron, Binance Smart Chain, Solona, etc., have their eyes on the space of being a leading platform in terms of network connectivity. Though Ethereum still tops the list, all these platforms are developed in order to challenge Ethereum’s dominance.
However, it is obvious to recognize the strong network effects for it since its introduction to the world of decentralized applications. So, why more DApps run on ETH compared to any blockchain network?
With the upcoming changes like layer-2 scaling solution or sharding update launching soon on the horizon for Ethereum, crypto enthusiasts have expectations from Ethereum to preserve an authoritative leadership position within its market segment.
However, keeping up with the basics, it feels that Ethereum is being overvalued and is still doing so down the road as it has the potential to grow.
