The Ethereum News column under Crypto Bootiks provides articles updating news about the cryptocurrency Bitcoin, the market power of Ethereum and the development of a cryptocurrency called Bitcoin denoted ETH.
In a recent seminar with Court Judge Sarah Netburn, Dugan Bliss, a senior adjudicator at the US Securities and Exchange Commission, argued that the agency has not yet made a formal position on the regulatory status of Bitcoin and Ethereum. Bitcoin looks more certain, however, the status of ETH is being disputed as is the case with XRP.
Ethereum could still be classified as a security
“So I want to make clear that this is my understanding of the current situation and I don’t want to be overly technical, but the SEC, itself, my understanding, it has not taken an official position. There is no action that it took to say Bitcoin is not a security, Ether is not a security.”
While former SEC chairman Jay Clayton has repeatedly stated that Bitcoin is not a security, there is less regulatory certainty over Ethereum.
Bill Hinman, former head of the SEC’s Corporate Finance Division, issued a statement of approval on the sale of Ether and non-securities offers just months before the end of his term in 2018.
Bliss stated that Hinman’s speech does not necessarily reflect the regulator’s stance on Ethereum:
“Now, there was a speech by a high-ranking person who said that to him that’s what it looked like but there has been no action letter, no enforcement action, none of the official ways in which the SEC takes a position on that matter that has occurred.”
However, the upcoming SEC chairman Gary Gensler has made it clear that both Ether and XRP are non-compliant securities in an interview with the New York Times:
“There is a strong case for both of them — but particularly Ripple — that they are non-compliant securities.”
Notably, Gensler confirmed that he sees Bitcoin as a commodity during his recent congressional hearing:
“So I think at the SEC it’s really to the extent somebody is offering an investment contract and security that’s under the SEC’s remit and exchanges that operate there. […] If not, it’s a commodity as Bitcoin has been deemed.”
Unlike Bitcoin, Ethereum pre-mined a significant portion of the money prior to holding the initial coin offering (ICO).
Bitcoin price failed to stay above USD 59,000 and corrected lower. BTC traded below the USD 58,500 and USD 58,000 support levels. It is currently (04:00 UTC) trading above USD 57,000 and it is seemingly preparing for the next major move.
Besides, most major altcoins are slowly gaining pace. ETH is trading above USD 2,080, with signs of more gains above USD 2,150. XRP/USD continues to outperform and it is now trading above the USD 1.00 level.
Total market capitalization
After struggling above USD 59,000, bitcoin price corrected lower. BTC broke the USD 58,000 support zone, but the bulls were active above the USD 57,200 support. It is now trading above USD 57,000 and it is approaching the USD 58,000 resistance. The first key resistance is near USD 58,500, above which the price might rise towards the USD 59,500 and USD 60,000 levels.
On the downside, the USD 57,200 and USD 57,000 levels are important supports. Any more losses might call for an extended decline towards USD 55,500.
Ethereum price also corrected lower from the all-time high at USD 2,155. ETH traded below USD 2,100, but it remained well bid near the USD 2,050. There was a fresh increase above the USD 2,100 level, but the bulls need to clear USD 2,120 for a fresh rally.
On the downside, the USD 2,080 and USD 2,050 levels are key zones. Any more losses might lead the price towards the USD 2,000 level.
BNB, ADA, litecoin, and XRP price
Binance Coin (BNB) traded to a new all-time high and it even broke the USD 400 level. BNB is consolidating above USD 400 and it seems like the bulls are not done yet. The next stop for them could be near the USD 422 and USD 425 levels.
Cardano (ADA) finally gained strength above the USD 1.220 resistance. ADA even broke the USD 1.250 level and it is now trading near USD 1.265. It could continue to rise towards the USD 1.300 and USD 1.325 levels. On the downside, the previous resistance at USD 1.200 is now a major support.
Litecoin (LTC) extended its rally above the USD 232 resistance and it tested the USD 245 resistance. LTC is now consolidating near USD 235 and it might make another attempt to clear the USD 245 and USD 250 resistance levels. If not, it could correct lower towards USD 225.
XRP price started a strong surge and cleared many hurdles near USD 0.800 and USD 1.00. It even spiked above USD 1.10 and it is now trading well above USD 1.00. In the short-term, there might be a dip, but the bulls might remain active near USD 1.00.
Other altcoins market today
Many altcoins gained over 10%, including QTUM, HNT, BTG, KCS, OMG, XEM, VET, EGLD, ETC, DOGE, SOL, NEAR, NEO, and LINK. Out of these, QTUM rallied over 40% and it is now approaching the USD 20.0 level.
Overall, bitcoin price is stuck in a range above the USD 57,000 support. The overall price action is still positive, suggesting a possible fresh increase above the USD 58,500 resistance.
A pending upgrade to the Ethereum network could result in ETH becoming an undiscovered asset scheduled for the London hard fork in July.
Top Ethereum developer Tim Beiko joked earlier that the decision should be made two weeks ago, and then he put the proposal in the Core Developers call today. No one had verbally objected.
“We are in a place where EIP is effective,” Beiko said during the call. I think we’re in a position where it’s ready to be included in the upgrade. ”
The EIP-1559 proposal, co-authored by Ethereum co-founder Vitalik Buterin, will convert Ethereum’s fee structure away from the bidding system that allows miners to prioritize the highest bids. The new fee structure adjusts the fees so that the user pays only the lowest bid per block.
Additionally, the base network fee will now be burned per transaction, potentially leading to a deflationary economy for ETH.
The proposal has been widely supported by nearly all members of the Ethereum community, including investors, speculators, and regular users of the network. An analysis of network transactions last year found that the EIP-1559 would burn 1 million Ether in 365 days – almost 1% of the network. Earlier this month, research from Grayscale concluded that the deflator would be a boon to the price of Ether, generating a round of positive price feedback.
Users have also been worried about gas fees for months, and there have been some notable examples of how high fees are for simple transactions, including the $ 36,000 Uniswap transaction.
One notable group that is less excited about this proposal are Ethereum miners. There have been threats of a hard fork and an alternative proposed, and some estimates have pegged revenue for miners at 50%. In the end, however, the proposal is now being continued, putting an end to selfish mining practices.
Miners consider lucrative ETH mining payments when the blockchain is in transition. Although there is a schedule to launch ETH 2, the effectiveness of the Minner is still very positive.
Ethereum miners continue to enjoy payments for their efforts in 2021, while the smart contract blockchain platform is about to leave the PoW consensus. Over the past few months, a lot of interesting things have happened in the crypto space, such as Bitcoin, ETH and many others that have seen a significant increase in value. The increased transaction volume and users have also directly benefited the crypto mining ecosystem.
Ethereum miners in particular have reaped significant profits due to the success of decentralized financial (DeFi) projects running on their blockchain. These diverse DeFi platforms have boosted transaction volume and activity on the Ethereum blockchain, leading to skyrocketing fees and increased processing times. While end users bear the brunt of rising transaction fees, miners are pretty happy.
As a result, Ethereum miners hit record revenue of more than $ 830 million in January 2021, levels not seen since the first few weeks of 2018 before ETH, Bitcoin and the broader crypto markets collapsed. spectacular peak of December 2017.
ETH mining is superior to Bitcoin
While Bitcoin stands firmly at the top of the list of cryptocurrencies by market capitalization, BTC miners do not enjoy the same level of return as ETH miners. Philip Salter, head of operations at Genesis Mining says that while ETH mining is “super profitable” at the moment, existing miners and potential newcomers must still be aware of the initial barriers to entry:
“The profit you can make with ETH is much higher than the profit from BTC. However, that doesn’t mean it’s any more beneficial overall. The reason is that the ETH mining hardware is more expensive than the BTC mining hardware, so you have a higher initial cost that you need to break even.”
Salter notes that LTC and Dash mining are also lucrative, but still not on the same playing field as BTC and ETH. All other cryptocurrencies are mined using a non-profitable graphics card like ETH mining.
Pylon.finance’s OxGrimReaper founder also weighs in on the current mining environment and outstanding returns of ETH mining:
“ETH is the most profitable mining opportunity right now, even more so because GPUs and hardware are locked in retail. In addition, it is the Lunar New Year now, which means that no production is taking place in factories in China. The barriers to entry at this point are still as high as they used to be ”.
The founder of Pylon.finance also said that while Bitcoin mining is less lucrative than GPU mining, it is easier to make money, as users can buy ASIC miners. However, GPU mining has various barriers to entry, including the cost of the GPU, the technical knowledge required to set up the system, and operational considerations.
OxGrimReaper also agrees that the success of the DeFi platform has a major contribution to the profits that Ethereum miners currently enjoy. Ethereum gas fees (which are fees paid to miners to process a transaction) have skyrocketed in parallel with the increasing use of DeFi platforms and he says this is a positive sign for miners:
“The front-running bots on AMM are the main catalyst for the gas cost war. But of course, the gas cost war means high costs of doing business. High gas is a great indicator that miners are making money. Gas has hit an all-time high this year, while mining has also hit an all-time high. Additionally, transactions on the ETH ecosystem hit an all-time high this year. These are all strong indicators for a healthy mining ecosystem, especially for those who already have their infrastructure in place. ”
ETH miners have some time to prepare for ETH2
Currently, ETH miners are continuing to monetize fees and high transaction volumes as they maintain the blockchain. Despite the sluggish transition to Ethereum 2.0 in progress, this will signal an end to Ethereum mining when the mainnet merges with the PoS Beacon chain, which was launched in December 2020.
The move away from the current PoW protocol, which Ethereum currently operates, is aimed at making blockchain more scalable, secure, and sustainable. However, it will also cease profitable business for Ethereum miners. While the full transition to ETH2 still has a lot of bright spots ahead, Salter says miners will carefully consider improvements to their operations as the growth of ETH2 continues:
“The Ethereum to PoS migration is potential for a very long time, but it looks like it will take about 2 years. Miners will assess the risk of this happening before they make any investments in new hardware.”
Salter added that the more pressing concern is that the upcoming Ethereum Improvement Plan EIP-1559, which proposes burning a large portion of transaction fees rather than giving it to miners, has a significant effect on the profitability of mining ETH waterfall:
“If accepted, this would result in a significantly reduced mining reward – up to 50% less. Such drastic changes affect the Ethereum ecosystem quite often, creating uncertainty for investors.”
Ethereum’s transaction fees continued to soar in February 2021, with data from Blockchair estimating that the average transaction fee for ETH reached $ 50, compared with an average of $ 30 per transaction by Bitcoin.
Meanwhile, OxGrimReaper says their operation can be quite easily swapped to mine other cryptocurrencies using GPUs instead of ASICs used to mine cryptocurrencies such as Bitcoin:
“There are more than 10 coins that our GPU can profitably mine without problems. We are doing so right now with the 4G card deprecated on Ethereum. It is mining Ravencoin with some profit. To us, the protocol is not as important as the difference between the electrical and the computed hash rate.“
However, commentators such as Lark Davis also known as “The Crypto Lark” emphasized the need for Ethereum developers to expedite the transition to ETH2 and provide users with the opportunity. avoid shockingly high Ethereum transaction fees.
While many users have used DeFi platforms, such as Uniswap and 1inch, to perform simple swaps between multiple trading pairs, the fees for these services and transactions are becoming lofty for ordinary users, making it difficult for newbies to access the DeFi field.
For the past 6 years, Ethereum has dominated the smart contract landscape and is arguably the only viable platform for launching decentralized applications (dApps) – driven by the large developer community and its advantage. ahead.
But over the past year, Ethereum’s limitations began to unfold, prompting its once ardent developer community to seek new horizons. Here, we take a look at 3 of the main reasons developers move from Ethereum to another platform.
Ethereum transaction fees
If you have been using Ethereum lately, you probably know that transaction fees are problematic.
Due to decentralized finance (DeFi) and the use of stablecoins on the platform soared in the last year, so too have the average Ethereum transaction fees – recently reaching over $ 25 and potentially several times higher. when the smart contract function is added.
In simple terms, developers in general are trying to build platforms and applications that are accessible to a wide audience, not just those who can pay an extra $ 25 per transaction.
As a technology designed to empower more people instead of a few, this high transaction fee is posing a significant entry barrier for users wanting to interact with the dApp.
To solve the problem, developers are now turning to more advanced platforms for much lower fees. Arguably the most prominent of these is Metaverse, a platform that uses a combined consensus system to keep fees to a minimum while maintaining speed.
Metaverse’s compatibility with Ethereum Virtual Machine (EVM) is another major reason developers are preparing for the release of the super-space mainnet.
Right now, interoperability is a buzzword in the crypto space. As more projects begin to realize the value of producing cross-chain applications, there is great incentive to develop bridges between blockchains – helping to provide a seamless experience and create a wave of interactive applications. new.
Although Ethereum has seen some improvements in this area, with the development of many token wrap protocols, layer 2 swaps platform and bridges, it still only provides interoperability. Restrictions with other blockchains.
But with true interoperability that promises to bring assets from one blockchain to another and allows for new, more powerful decentralized use cases, applications than ever before, developers begin to settle. their own problems – by applying the foundation built with interoperability at the core.
In recent weeks, the Substrate-based Polkadot blockchain has emerged as a major focus for these developers – as its new bridging and chain-forward technology makes it easy to build cross-chain applications without It is necessary to enforce identity among blockchains.
Likewise, platforms like Metaverse and Binance Smart Chain have also seen a large number of developers looking to build apps that are interactive thanks to their enhanced interoperability.
Double up on efficiency
A few years after Bitcoin launched, despite being very secure, Bitcoin’s consensus mechanism is also extremely wasteful when it comes to the use of energy.
While this wasn’t a big deal in its early days, when the Bitcoin mining network was small, it has become increasingly problematic in recent years, as energy use (and hence the impact on with the environment) comparable to a small country.
Ethereum is not much different. As one of the most widespread proof-of-work (PoW) mining networks currently in operation, Ethereum requires incredible energy to maintain the network’s security. And while Ethereum 2.0 is set to solve this problem with its transition to a mixed proof-of-stake and proof-of-work consensus system, it’s far from happening – and not yet ready. .
But developers often don’t have time to wait. Because of this, they started looking for more efficient alternatives.
In general, this search leads them to one of many proof-of-stake blockchains, which can reach consensus using a validator network – consuming less energy but achieving a similar level of security. .
Platforms built on Parity Technologies’ Substrate technology are currently gaining a lot of attention, due to their ability to combine proof-of-work security with proof-of-stake efficiency in a consensus mechanism. combined.
The Managed Assets (AUM) of cryptocurrency exchange trading (ETP) products have risen to almost $ 44 billion, even as the transaction volume for these products decreased from the previous month.
According to CryptoCompare’s Digital Asset Management Review, assets under management across all crypto ETPs increased by 50% to $ 43.9 billion, despite a decrease in the transaction volume of these products. 37.8% to $ 936 million.
The report adds that even though bitcoin has just hit an all-time high of over $ 58,000, ETP volumes have fallen, with average daily transaction volumes from $ 936 million to $ 1.51 billion. The best performing bitcoin ETF was Bitwise’s Listed Trust Product (BITW) with 15% returns in 30 days, outperforming CryptoCompare’s CCCAGG BTC / USD index, up 64%.
BITW also outperformed the MVDA, an index by market capitalization that tracks the performance of the 100 largest cryptocurrencies by market cap, up 48.9 percent year-on-year. The most liquid exchange-traded products by trading volume include Grayscale’s Ethereum Classic Trust (ETCG), with 105.5% profits.
Grayscale’s Ethereum Trust (ETHE) product has reported underperforming other ETPs, achieving a 34.8% return in 30 days, almost 10% lower than CryptoCompare’s CCCAGG ETH / USD Index, up 44 % in the same period. The report points out that the top 15 ETPs by volume include Grayscale’s ETHE trust fund, XBT Provider’s ETH market, and 3iQ’s Bitcoin Fund (QBTC).
Since last month, the market premium of these products has fallen sharply. The report notes that 3iQ’s QBTC-U Bitcoin Fund is even trading at an 11.1% discount from its net worth.
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