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The Second-Largest Cryptocurrency Experienced Rough Nine Months Despite ETH 2.0 Plans

Ethereum, the second-largest cryptocurrency in terms of market capitalization has been having a very unpredictable year so far. Ethereum’s creator, Vitalik Buterin, wanted to step outside of the “cryptocurrency” realm and use Ethereum as a global computer system for sorting different activities, including bank settlements, file transfers, check-ins and others. The plan relied on the utilization of smart contracts.

The Bitcoin runner-up, however, faced multiple difficulties during this year alone, postponing the transition to ETH 2.0 until 2020. ETH 2.0 is a change in the way how transactions are verified and executed. The ETH 2.0 protocol will implement the Proof-Of-Stake method, allowing users to stake their tokens for transaction verifications.

The transition to ETH 2.0 will not happen overnight – it may take a great effort for Ethereum to migrate to the new protocol. The migration should make Ethereum transactions faster, more reliable, and the whole system - more scalable.

Joseph Lubin, one of Ethereum’s co-founders, stated that the ETH 2.0 upgrade will increase Ethereum’s scalability in the next 24 months.

Despite the ETH 2.0 uncertainties, Ethereum ended Q2 with price increase trends. In April, Ethereum’s price increased with 27 percent – from $139 to $177, before falling to $150 at the end of the month. During May there was a steady price peak, with a monthly high of $271 per ETH. Q2 finished with another price increase, reaching a quarterly top of $335.

The third quarter saw decreases for Ethereum. Ethereum started Q3 with a price of $285. Despite the steady first week, Ethereum prices started tumbling down to $202. August also started with lowered prices, with 1 ETH falling beneath the $180 support zone. At the end of the month, Ethereum traded for $166, falling from the Q2 high of $335.

The sub-par performance for the world’s #2 crypto is mainly due to bad news around Ethereum. Back in August, Buterin admitted that Ethereum’s blockchain is “almost full,” proving that scalability is the real bottleneck for his blockchain. Cloud service provider Chainstack also published a report stating that more than 50 percent of Ethereum’s nodes are operating on cloud servers, such as Amazon Web Services.

The bad news really put Ethereum in a bad position. However, DApp developers still prefer Ethereum over other competitors, research from Dapp Radar reveals.

The outlook for Q4 is positive, as in the first two weeks of October Ethereum recovered from its price devaluation and reached $195, although it is currently traded at around $160 USD. Ethereum’s future, however, is not threatened by ETH’s short-term problems. Investors and traders are still interested in Ethereum, despite its scalability issues.

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