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Bitcoin and Ethereum have been the top two cryptocurrencies for a while now, primarily due to the largest market capitalization indicators. Nevertheless, in the past year the tendencies have shifted and the leading position is now shared by XRP and Ethereum. It was not just Bitcoin that moved to the sidelines, but many other less meaningful coins as well, which makes us question the stability of Ethereum and its potential performance in 2019. Yet, some make projections about Ethereum’s unprecedented growth, due to the elimination of less significant competitors and larger room for development. In any case, such trends will make the industry’s environment more turbulent
We have distinguished the five main issues that the cryptocurrency community is about to face this year.
1.Dapps and smart contracts
At the moment of their birth, smart contracts were indeed a breakthrough. Developers became able to program a decentralized application (dapp) on the Ethereum blockchain on the basis of smart contracts that allowed for an automatic execution of an action upon the fulfillment of specific criterion. Dapps were introduced to bring the user experience to a new level. For instance, users became able to take loans using Ethereum as collateral. Besides, the open-sourced decentralized exchanges and liquidity providers also benefitted from the technology that helps to connect the highly fragmented token ecosystem. Dapps have enabled the industry’s participants to effectively accomplish certain needs without a need for a centralized authority. Despite the fact that he Ethereum community has seen significant expansion in the last couple of years, dapps still have a long way to go before they become comprehended by individuals with no strong background in the sphere. Efforts must be put in place to achieve the ultimate goal – to popularize the technology and make it appealing for the newcomers.
2. What happens with ICOs?
ICOs were efficient in fueling the interest and driving forward the innovation in the industry, which in turn helped to maximize the adoption of new technologies. In 2017 alone, ICO helped companies raise more than $5.5 billion, while in 2018, that figure reached $6.3 billion in the first three months of the year. It is obvious that the more funds are injected into a market, the larger is the interest in it. It is amazing how media coverage of ICO and innovation attracted hundreds of curious individuals, and made them the participants of the blockchain world. However, as soon as the price of Ethereum showed dramatic growth, many began to perceive this as a reason to cash out. This is the reason why numerous developers, who were there at the start of Ethereum’s path left. The chaos that the Ethereum community was overwhelmed by led to the emergence of scam ICO projects, which created a negative stigma around the crypto-currency and raised public skepticism. Now, more and more companies are turning to traditional and venture capital financing in order to overcome the tough time that the market is going through.
3. Will the Ethereum community fall apart?
It is not just about how good or promising the technology is, but also about the collective involvement and motivation of the community. Ethereum began with the idea of working toward a common cause and peacefully resolving all the disputes that appear along the road, instead of hard forking. The community’s main principles have been compromise and collaboration, yet will this last for long?
The founders of Ethereum continue to actively engage with other participants of the industry at conferences and other events and platforms that aim to bring the community closer. It is important to continue fostering such attitudes and not simply rely on what has been built already. The market is volatile and remaining committed to the initial goals and virtues seems to be the right tactic to survive this period.
4. Restoring the trust
As mentioned before, ICOs have had a negative influence on the reputation of Ethereum in the society. Thanks to this, the world of crypto-currency remains undiscovered for many up until today. Consumers and users must be protected against the traps they can potentially fall into, such as scams and bad projects. For this reason, the community must be informed and educated on how to distinguish the good from the evil. Essentially, more materials and resources should be made available and promoted. Crypto operations and transactions are not as intuitive as it may seem, so those who are used only to the traditional financial ecosystem must be educated about the best practice behaviors.
5. What action must be taken?
In order to put things into perspective, it is necessary to take time and analyze the existing market conditions, as well as the possible ways to deal with them in the most efficient manner. A holistic and steady approach is needed to ensure future success. Strategic thinking is the most beneficial tool that the Ethereum community must take advantage of.
Before strong results begin to show, keeping pace and continuing the development of the existing product with interest and passion is the way to go.