Ethereum price prediction could certainly be very tricky, after the incredible escalation in the value of Bitcoin. At heart, Ethereum mining is rather similar to Bitcoin, and the value of this cryptocurrency has already increased quite considerably, even if it has yet to reach the sort of levels that Bitcoin has touched.
Proof of work
Both Ethereum and Bitcoin use proof of work as a central feature, meaning that some making an Ethereum price prediction have already suggested that the cryptocurrency will reach Bitcoin-like value in the coming years.
While it is a little too early to concur with this summation, there is no doubt that Ethereum has massive potential. It has already made major moves against the dollar, and this is likely to continue in the coming weeks as the cryptocurrency becomes more recognized in the mainstream.
Already, Ethereum is heading towards the psychologically important $1,000 barrier, with the cryptocurrency trading at around $760. It wasn’t that long ago that each Ethereum unit was worth only a few dollars, so we are already seeing an increase in value that is reminiscent of Bitcoin.
This undoubtedly makes Ethereum price prediction a tricky undertaking. It has recently consolidated its position against the dollar, making the cryptocurrency an increasingly steady investment. While the digital system is likely to experience resistance at $800, many believe that its value will eventually far exceed this figure.
Altcoin alternative
One of the issues which complicates Ethereum price prediction is other altcoin solutions entering the market. There is some debate over the potential for scalability with both Bitcoin and Ethereum, and this could impact on the long-term viability of the two cryptocurrency solutions. Bitcoin in particular has struggled with lengthy confirmation times, which are becoming far more prominent considering the scale that Bitcoin transactions have now reached.
While it is far too early for this to be an issue for Ethereum, there is nonetheless the prospect of network congestion developing in the foreseeable future. This could very well threaten the dominance of a few altcoin networks, and instead open the whole sector up to massive diversification.
And another issue that Ethereum may encounter is that it is nowhere near as established as Bitcoin. It would be inaccurate to characterize Bitcoin as a mainstream currency, but it is clearly far more recognized than any other cryptocurrency. Ethereum does not have this sort of cultural penetration, and therefore it could be far more influenced by a diversification of the altcoin space than Bitcoin.
We also know from previous technology experience that the early adopted medium does not always become the dominant platform in the longer term. The cryptocurrency standard has yet to be truly developed, and this means that there is space for other solutions to dominate the market in the coming years. Eventually, Bitcoin and Ethereum could be viewed as out-of-date rather than vital technology.
Brand recognition
These factors undoubtedly impact on Ethereum price prediction, but it’s not all bad news for this embryonic cryptocurrency. Ethereum has already established itself as the second biggest player in this growing niche, and this early brand recognition could certainly pay off.
Another big positive for the Ethereum system is that the potential for growth in this sphere is massive. Although the quantity of cryptocurrency being traded on a daily basis has increased massively, this will only be the start of what will become an increasingly important market. The launch of Bitcoin futures will probably be followed by other solutions in the cryptosphere, and this can only be positive for Ethereum price prediction.
It could be argued that Bitcoin lends itself more naturally to the altcoin currency niche than Ethereum, as it was originally designed to be a digital payment platform and genuine currency. Ethereum is a development platform, never intended to change hands for goods and services, and this could also potentially count against it. Certainly, Bitcoin is considerably more visible, although the fluctuation in its value doesn’t exactly make it an ideal currency at present.
Bullish on Ethereum
But in the short-term it is easy to make a bullish Ethereum price prediction. The established players in the cryptocurrency niche are likely to escalate in value, particularly due to the amount of media attention and column inches currently being devoted to Bitcoin. Litecoin has also been trading impressively recently, underlining the fact that several altcoins could become viable.
Perhaps scalability is the major issue for the cryptocurrency sphere going forward, though. Incredibly, before the price of Bitcoin increased meteorically, there were suggestions that it could diminish in value significantly. This was due to the threat of a so-called hard fork, which revolved around the ability of Bitcoin being able to scale its network. Ultimately, this did not come to pass, but it would have had a massive impact on the value of Bitcoin had it occurred.
Similarly, Ethereum is already having issues related to scale, making Ethereum price prediction a tricky proposition. Even founder Vitalik Buterin has acknowledged scalability issues, illustrating just how serious this could become. If the speed of Ethereum transactions was seriously reduced this would have a massive impact on the viability of the platform, and would certainly be bearish for Ethereum going forward.
Proof of stake
Nonetheless, this shouldn’t be viewed as a disastrous prospect when considering Ethereum price prediction. Ethereum has already established itself as a significant platform, and its developers are already tackling the problem of scalability, which will potentially include a shift from proof of work to proof of stake. This latter system is reportedly more cost-effective, and should be implemented in the near future.
Considering that businesses clearly need speed and flexibility within the cryptocurrency sphere, this obviously bodes well for Ethereum, and suggests that the altcoin will continue to grow in the future. The blockchain is clearly developing in new and interesting ways on an almost daily basis, and if this means that Ethereum price prediction is hazardous, it also provides huge potential for the niche.