Ethereum network is facing many operational challenges that put ETHER token at risk
In 2021, Ethereum has outperformed major cryptocurrencies like Bitcoin when it comes to growth. Although it is currently showing no signs of recovery from its recent crash on December 4th, cryptocurrency investors believe that Ethereum will make a far better comeback in 2022. Unfortunately, that seems very unlikely with the current deteriorating situation. The Ethereum network is facing many operational challenges that put the cryptocurrency at the risk of losing to its rivals such as Cardano and Solana.
Over the past few years, Ethereum and ETHER have become synonymous with each other. While Etheruem is the blockchain network that backs the ETHER token, people consider them both as an amazing decentralized model and a cryptocurrency. Therefore, the Ethereum network’s challenges often directly reflect on ETHER’s price. Ethereum’s connection with Bitcoin is also inevitable. Yes, ETHER price is also pegged to BTC’s price rallies quite often. In a nutshell, Etheruem network and its digital token are highly influenced by the mechanism behind it and the cryptocurrencies surrounding it. However, Ethereum is having a hard time combating its technical challenges recently. This has paved the way for other potential virtual tokens like Solana and Cardano to step on their accelerator. If the challenges prevail and Ethereum fails to address them in 2022, then its competitors will take over ETHER’s position real soon.
The Technical Glitch in Ethereum Network
Without evaluating its capabilities, many investors are coming forward to invest in Ether tokens and institutional investors are also crowding the space. Besides, the Ethereum network also houses other applications that are relatively complex and difficult. Although its features are pretty amazing, it leaves us to the question, “Can Etheruem network really handle all this?” Using an open-source code with algorithms that is backed by supply and demand, the site runs many applications.
While Ethereum’s DeFi application is often considered a top choice, the practical numbers suggest otherwise. According to research by Dune Analytics, 2-5% of transactions on Ethereum-based decentralized exchanges failed due to complications such as slippage or insufficient gas price. Besides, the Ethereum network is also facing bumps due to its inability o scale to meet demands. Although its recent upgrade, Ethereum 2.0, is launched to address these underlying technical issues, it might take years for the platform to completely streamline the revisions.
Ethereum’s Unexpected Bug Attack and Split
In August, Etheruem ran into unexpected trouble when the network was split into two separate chains after falling victim to a bug in the software. Since the platform serves as a major source to develop applications like Dapps, NFTs, smart contracts, etc, it shook the users for a while. Ethereum initially panicked as it could’ve been a ‘double-spent attack’ that could put all its users’ data and billions of dollars at risk. Fortunately, the attack left most of its features unscathed. The incident brought to light that although Ethereum is fueled by amazing technology, it is relatively new and needs time to attain maturity.
Is Ethereum 2.0 Really Efficient?
Currently, Etheruem runs on a proof-of-work (PoW) system, which is capable of making 15 transactions in a second. It is double times what the Bitcoin network can do. When the number of transactions increases and the fee reduces after Etheruem 2.0 upgrade, the platform has more responsibility than ever before to make sure that the work goes seamless. Besides, building Dapps, NFTs, and smart contracts in Ethereum 2.0 is complicated as it demands more technical skills. Many users might lack sufficient education to get the best out of the platform.
How will this Pave the Way for Solana and Cardano?
As mentioned earlier, the Ethereum platform and its functionalities have a direct impact on ETHER’s price. Therefore, if the network fails to address user problems, it will eventually reflect on ETHER’s market presence and its stand in the market.
Solana and Cardano are two amazing ‘Etheruem Killers’ that are in the line to take over its position anytime. Solana has surged more than 17,500% in 2021 alone, outperforming many other cryptocurrencies. It gives heavy competition to Ethereum over the smart contract capabilities. Solana is more quicker and efficient compared to its counterpart.
Many believe that Cardano is the direct competitor of Ethereum as the long-term project is developed by Ehtereum co-founder at its helm. Cardani is one of the few L1 blockchains that refuse to compromise their attributes in favor of scalability. Besides, its grand vision for the future keeps it at the forefront of adoption.
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