The Ethereum Price Fall Continues, Falls Below $200
Last week has been pretty bad for the world’s second-largest cryptocurrency Ethereum. The price of Ethereum has dropped by more than 33% in the last one week and is now trading below $200 and making its new low for 2018.
With its new 2018 low, the market cap of Ethereum has dropped down below $20 billion. Last week was very rough for the crypto investors, as the market reacted negatively on the rumors of Goldman Sachs opting out of its launch of the crypto trading desk. Bitcoin and many other altcoins dropped instantly correcting by over 10-15% in just a few hours.
However, Goldman Sachs CFO later clarified that the news was fake, but unfortunately, it was too late by then! On the other hand, Ethereum is currently facing a lot of technical challenges when it comes to scalability.
On September 3, Jeremy Rubin, a technical advisor to Stellar and Bitcoin advisor, shared a piece on TechCrunch titled “The collapse of ETH is inevitable.” Jeremy argues that the inability of the Ethereum network to scale and the insufficient security of its smart contracts could possibly leave it behind its competitors. Jeremy made a bold statement saying it could inevitably lead to a collapse by “economic abstraction.”
Economic abstraction refers to the payment of the smart contract fees (Gas) and transactions through a token that is not native to the Ethereum network. Instead of paying the gas in ETH tokens, the smart contract owner prefers to pay it in the tokens native to their contract. Jeremy says that this would eventually lead to the collapse of ETH tokens.
Ethereum co-founder, Vitalik Buterin, reacted to Jeremy’s post and replied on his Reddit handle saying: “In Ethereum as it presently exists, this is absolutely true, and in fact if Ethereum were not to change, all parts of the author's argument (except the part about proof of stake, which would not even apply to Ethereum as it is today) would be correct.”
Buterin also went to propose two protocols, which if implemented, would enshrine ETH at a native protocol level. However, the latest criticism of Ethereum and its heavy downfall in the price has not stopped the progress of the network.
On Friday, September 7, Darren Langley - senior blockchain developer at Rocket Pool (an Ethereum Proof of Stake pool) unveiled the roadmap for Ethereum 2.0. The Ethereum 2.0 is built integrating both - Casper and Sharding protocols. Langley wrote: “It has an organic quality that hopefully will contribute to how human organization can scale up but remain inclusive.”
The drastic fall of Ether in the last few weeks looks to be a lot worrisome, but we expect that its strong development team to deliver conniving results for the bright future of the network.