Ethereum

Polkadot: Vitalik’s Nightmare, or a Blockchain Dream Come True!

Although it’s possible to draw comparisons between almost any two blockchain development platforms, comparing Ethereum with Polkadot is almost an inevitability. They use a similar architecture and proof of stake consensus to achieve scaleability. This is not only because Vitalik Buterin

and Dr. Gavin Wood have a common history in Ethereum.

Polkadot and Ethereum are Entering the Final Stretch of the Runway for Chain Supremacy

The coming year promises to be a significant one for both networks. Ethereum has been working on a number of improvements in advance of the “merge”, which will take place when the Ethereum main chain joins with the proof-of–stake Beacon network. Ethereum will then move entirely to proof of stake and abandon its proof-of work consensus. As the Beacon chain is expanded, more upgrades will be possible. These additional chains or shards are intended to increase scalability.

Although the timelines are a bit unclear, it appears that Polkadot will reach its next major milestone before Ethereum merges. ‘Parachain auctions‘ are the process of awarding the first shard slots on Polkadot, a step that Kusama, Polkadot’s experimental “canary network,” recently achieved.

If it is only a matter of time before Polkadot does the same, then we can expect the network to be fully operational and supporting a variety of uses cases by the end of the year.

A Potted History

For their part, both founders have always tried to emphasize that they don’t compete with each other. Buterin and Wood have a lot in common. Both are core members of the team that cofounded Ethereum. Dr. Gavin Wood invented Solidity programming language, and Parity Technologies has been an important technology engine for Ethereum. Wood founded the Web3 Foundation which supports Polkadot’s development.

He left his position as Ethereum’s Chief Technology Officer in 2015, having already proposed a new kind of infrastructure that would level up the newly launched smart contract platform into a more robust and scalable platform. Tellingly, Wood didn’t mention Buterin in his final Ethereum blog post, despite name-checking several others.

While Wood and Buterin were reluctant to discuss the rival projects, others have been more open about their opinions. Peter Mauric, Head of Public Affairs at Parity Technologies, recently addressed the comparison, commenting on Ethereum’s shortcomings and referring to the smart contract platform as a “proof of concept” which had provided the education necessary to build Polkadot.

Clash of Titans

After three years of development, Polkadot was launched on mainnet last January. It’s been in operation since the parachains were operational and has not had any applications. However, it has received a lot of interest. Polkadot promises true interoperability among applications running on different chains.

The Ethereum team has been working hard on an upgrade to Ethereum 2.0 since Polkadot’s inception. The two platforms have many technological similarities. Both platforms use a proof-of-stake variant. In Ethereum’s case, it’s an open validator network where anyone can join with the requisite minimum 32 ETH stake. Polkadot’s Nominated proof-of-stake allows DOT holders to stake DOT in order to nominate validators.

Both platforms use sharding for scalability. This connects sharded chain to a central network security-controlling chain. Ethereum 2.0 will also eliminate Solidity and the Ethereum Virtual machine in favor of a web assembly languages called eWASM. Polkadot, despite being Gavin Wood’s invention, is also designed for standard web assembly languages. This opens smart contract development up to a larger global pool of developers who are familiar with general languages such as Rust, C/C++, and Go.

Of course, these similarities could be just a coincidence. Gavin Wood feels that Ethereum 2.0 is very similar to his creation.

On-chain vs. Off-chain Governance

There is one crucial difference between these two platforms. Although consensus is achieved on-chain, Ethereum’s governance has been an off-chain issue. Seemingly in light of Ethereum’s experience with contentious hard forks, Polkadot has shunned this model in favor of a forkless model of on-chain governance.

It’s important to remember that both on-chain as well as off-chain governance come with their pros and cons. It will be interesting to see how the different approaches compare.

So two visionary founders and two ambitious roadmaps. Two platforms that are comparable. But there is one crucial difference. Polkadot was developed from scratch for five years. It has been able to test and build everything twice, once on the testnet and again on Kusama. It will be a fresh start when Polkadot launches its parachains.

While this feat is not easy, the Ethereum team faces a much more difficult task. They will need to change the engine of a moving vehicle in order to make an analogy. This simple fact explains why it could take seven years for Ethereum to reach proof-of-stake. It will take even longer for the network to achieve the level of scaleability that its supporters have waited so patiently.

By that time, who can guess how fast adoption will have accelerated on other networks?

Nobody can know what is going on inside Vitalik Buterin’s head. To use the vehicle analogy, it is more appealing to jump into a brand-new sports car than to try to drive an old jalopy down the freeway at top speed. It’s hard to imagine Vitalik Buterin disagreeing with Polkadot as he watched the development of the vehicle.

Which blockchain do you think will come on top — Ethereum or Polkadot? We’d love to hear from you in the comments below.

Image Credits: Shutterstock, Pixabay, Wiki Commons, Forbes

Disclaimer: This article is for informational purposes only. This article is not intended to be a solicitation or offer to buy or sell any products or services. Bitcoin.com does not provide investment, tax, legal, or accounting advice. The author and the company are not responsible for any loss or damage resulting from or in connection to the content, goods, or services discussed in this article.

Ethereum

Ethereum Price Analysis: What’s Ahead for ETH After a 9% Weekly Dip?

Ethereum currently rests at a notable support region near $3.2K, with market participants closely observing the potential for a bullish rebound.

The Funding Rates metric offers valuable insights into the sentiment within the perpetual futures markets, helping to gauge the likelihood of a recovery.

Technical Analysis

By Shayan

The Daily Chart

Ethereum has seen consistent declines following its rejection at the $4K resistance level, indicating the dominance of sellers. Most recently, another sharp decline pushed the price toward a substantial support zone, defined by the 100-day moving average of $3.1K.

This dynamic support is critical as demand concentration near this region is expected to curb downward momentum, with a bullish rebound being plausible if buying interest emerges.

Currently, ETH is trapped between the 100-day MA ($3.1K) and the $3.5K resistance level, forming a tight consolidation range. A decisive move in either direction will likely determine the mid-term trend.

The 4-Hour Chart

On the 4-hour timeframe, Ethereum broke down from an ascending wedge pattern, a bearish structure that typically signals further declines. This breakdown triggered a swift sell-off, pushing the price toward a support zone defined by the 0.5-0.618 Fibonacci retracement levels.

This support zone has the potential to stabilize the price and possibly initiate a short-term bullish rebound. However, persistent bearish pressure could result in a break below this line, intensifying the downtrend.

If Ethereum breaches this critical support zone, it may trigger panic selling, further strengthening sellers’ dominance. Conversely, a sustained rebound could pave the way for a recovery toward the $3.5K resistance level.

Onchain Analysis

By Shayan

Examining the chart, the recent market correction has coincided with a significant decline in funding rates. This shift suggests growing bearish sentiment among speculators, with many traders betting on further decreases in ETH’s price.

However, upon reaching the substantial support zone at $3K, the Funding Rates metric has started to show signs of recovery. A notable bullish spike in the metric suggests an influx of buying interest as market participants begin to open long positions in anticipation of a price rebound.

If this recovery in funding rates continues, it could indicate sustained demand and the potential for a bullish rebound from the $3K support. On the other hand, if the current recovery loses momentum or reverses, it would signal a return to bearish sentiment, paving the way for a deeper correction.

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Cryptocurrency charts by TradingView.

Ethereum

Bitcoin Price Stalls at $94K, Ethereum Struggles to Maintain $3.2K (Weekend Watch)

Bitcoin’s volatile end of the week resulted in a price drop toward $91,000 and a subsequent surge to $96,000 before the asset calmed roughly in the middle.

The altcoins continue to struggle as SOL, ADA, and AVAX have charted 4% daily declines.

BTC Calms at $94K

It was nothing short of a volatile rollercoaster of a week for the primary cryptocurrency. It all started quite promising after the most recent MicroStrategy purchase on Monday, as the asset flew past $100,000 for the first time this year and kept climbing on Tuesday morning to over $102,000.

However, that’s when the landscape changed, and BTC slumped hard later that day, and on Wednesday, it slumped to $96,000. Although that was a painful correction on its own, bitcoin kept plunging in the following days to $91,200 (on Bitstamp) on Thursday, which became its lowest price tag in over a month.

The bulls managed to intervene at this point and pushed BTC north. More volatility ensued with several big moves that eventually pushed the asset to $96,000. However, it failed there and has lost almost two grand since then to trade at $94,000 as of now.

Its market cap has risen to just under $1.870 trillion on CG, while its dominance over the alts is up to 54.5%.

ADA, SOL Struggle

Most altcoins are in the red today as well. Ethereum slipped below $3,200 on Thursday, and even though it managed to recover some ground since that low is close to breaking below it now after a 2.3% daily decline. XRP is among the few alts with minor gains today.

In contrast, SOL, ADA, SUI, AVAX, and LINK continue to lose value, with losses of up to 4%. SOL is well below $190 now, while ADA is just over $0.9. More painful losses come from OM, ICP, and RNDR from the larger cap alts.

The total crypto market cap has lost some steam since yesterday and is down to $3.43 trillion on CG.

Cryptocurrency Market Overview. Source: QuantifyCrypto

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Cryptocurrency charts by TradingView.

Ethereum

Weekly Bitcoin, Ethereum ETF Insights: The Highs, Lows, and Key Takeaways

After struggling at the end of the year with numerous consecutive days of net outflows, the spot Bitcoin ETFs in the States finally registered some notable inflows on Friday.

The Ethereum counterparts sit in the opposite corner, as they have been mostly in the green since mid-December despite the FOMC aftermath on the entire market.

BTC ETFs Are Back

The latest FOMC meeting that took place in mid-December had a dramatic and immediate effect on US-based investors in terms of their Bitcoin-related activities. Following a superb streak after the presidential elections in which they poured billions of dollars within weeks into the regulated BTC financial vehicles, they did a 180-turn and started taking funds out.

December 19 was the worst day in terms of daily net outflows, with $671.9 million taken out. By January 2, seven out of the nine trading days were in the red, with a total withdrawn amount of roughly $2 billion.

This negative streak was finally broken on Friday as the spot Bitcoin ETFs saw $908.1 million in net inflows. Fidelity’s FBTC led the pack with $357 million, followed by BlackRock’s IBIT at $253.1 million and Ark Invest’s ARKB at $222.6 million. No fund recorded any outflows.

Friday’s numbers were so impressive that they managed to turn the whole week around. After the $415.1 million withdrawn on Monday and $242.3 million on Thursday, the week ended in the green with $256 million in net inflows, given the minor $5.3 million on Tuesday.

BTC’s price actions within the same week were quite volatile as the asset slumped hard on Monday amid the massive outflows to $91,300. However, it pumped to almost $99,000 later during the week as the inflows returned.

Ethereum ETFs’ Landscape

Unlike the BTC ETFs, the funds tracking Ethereum saw fewer days in the red after the aforementioned Fed meeting. Withdrawals were observed on December 19 and 20, but investors started to pour funds into them in the following days.

The past week was less positive, though, as net outflows dominated. $55.5 million was withdrawn on Monday and $77.5 million on Thursday. The $36 million in net inflows on Tuesday and $58.9 million on Friday couldn’t make up the difference, and the week ended with $36.1 million in the red.

ETH’s price tumbled hard on Monday as well but is 6.5% up on a weekly scale, which is more than double the increase for BTC. As of press time, Ethereum’s native token stands above $3,600.

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