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Ethereum will Kill this $15 Billion Project if its Gas Fee Remains Low

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A 20th Gen, New Agency focussed on independent blockchain journalism and a FOMO, FUD free media network.

If you’ve been using Ethereum for a while, then your only concern would be reduced gas fees but it’s not for these guys. Yes you’re right, we’re talking about MATIC. The $15 billion L2 solutions for Ethereum.

During the early days of 2021, ETH transactional costs were crazy. It was crazy enough for us to pay $50 for sending $1 worth of Ethereum to other accounts. It’s the same for sending $5M too. But the fact is that the gas fees went as high as 500 GWEI.

Let’s understand how Ethereum works; Ethereum is a state machine. It stores accurate, straightforward information. For updated information on Ethereum, a handful of miners validate the transaction. Thus for their work of validation, we pay them a small number of transaction fees. These fees are made in the native currency of the blockchain, which is ETH.

During these early days, it’s crazy for users, and it’s hard for them to pay these insanely high gas costs or transactional costs. Most of the applications on Ethereum are micro-financial ones where the price per ticket ranges from $100 — $1000. So paying $50 for a $100 transaction is losing 50% of the funds they transfer. That doesn’t make up a perfect ecosystem. So there came upscaling solutions, the so-called L2 solutions. MATIC is a famous name among them; the transaction costs on MATIC are less than 1000x less than that of Ethereum.

So people started thinking of ZK-Rollups and Optimistic Rollups, the two kinds of L2 scaling solutions. Layer 2 implementation is a simpler one. The more secure blockchain with several validators/miners store the state (data), and the one with fewer validators/miners would compute complex transactions as they’re cheaper. But this L2 has certain drawbacks; for example, the plasma layer of Matic has a checkpoint duration of 7-days which is a longer duration and is not suitable for real-day applications. MATIC is working on it and soon will make it quicker.

But the most significant gas guzzlers on the Ethereum network were Uniswap & USDT(World’s largest stablecoin by MarketCap). They were the primary reasons for crowding the network. In any blockchain, the transaction speed is the average of the block size and the size of each transaction. Ethereum’s block size increased 100% in the YoY growth implicating more transactions in a single block that might boost the network’s throughput.

Learn more about the statistics of block size here https://ycharts.com/indicators/ethereum_average_block_size

So, in short, the nature of MATIC is to be a side-chain to boost the adoption of the Ethereum network by reducing the computational cost. But Ethereum is slowly fixing the main problem in their primary network.

Also, the L1 <> L2 communication between Matic and Ethereum is not easier for developers who follow traditional decentralized app development. It always needs an intermediary mechanism to verify transactions, making it even more challenging to maintain sync between both networks. 3-Hour wait time in PoS chain and 7-day wait time in Plasma chain (For Security Reasons, as per MATIC’s team) will not make up an application work in real-life.

Also, the infrastructure needed to build a normal D-App and L2 Dapp drastically varies, which is unsuitable for standard applications built on Ethereum. So, suppose the gas fees are just 10 Gwei. In that case, MATIC is necessary for traditional apps like yield farming, staking, lottery pools, and other financial apps where computation is less expensive & intensive.

So if Ethereum fixes the gas problem, the L2 projects become unnecessary. So investors should exercise caution in dealing with L2 projects, especially when ETH gas prices fall over 300% in less than a week. MATIC might become a dominant chain, but we cannot compare Matic to Ethereum in terms of nodes/miner/validators. Still, institutions planning to do intense and low-cost computation over a blockchain can consider Matic for sure. But this article is focused on the 90% micro-financial integral ecosystem of the Ethereum network.

Disclaimer: This article is informational and doesn’t accuse or praise any project/token/cryptocurrency in any form. If perceived in such a way, it’s coincidental. Cryptocurrencies are a volatile form of investment where you might lose your living in seconds. Consult your financial advisor for investing.

by Blockonomist @blockonomist. A 20th Gen, New Agency focussed on independent blockchain journalism and a FOMO, FUD free media network.Read my stories

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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://hackernoon.com/ethereum-will-kill-this-dollar15-billion-project-if-its-gas-fee-remains-low-6u3a3545?source=rss

Blockchain

Revolut Losses Deepen in 2020 despite 57% Revenue Jump

The $5.5 billion startup is planning for further fundraising.

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UK fintech Revolut reported a 57 percent jump in its 2020 revenue, but the company’s losses for the year deepened despite the year-end cryptocurrency boom. The operating loss for the startup came in at £200.6 million.

The financials released by the UK digital bank shows that it ended 2020 with total revenue of £261 million, up from the previous year’s £166 million. The startup also made £39 million in fair value gains from crypto assets, meaning it holds some cryptocurrencies in its balance sheets.

Though the company generated £123 million as gross profits, it reported operating losses at the end of the year. The company spent £266 million alone as its administrative costs. However, losses narrowed significantly in the final quarter. With a staff of 2,200 people, the company reported £55 million in operating losses in Q1, which came down to only £5 million in the final quarter.

The gross margin of the startup also improved to 61 percent in Q4 from only 29 percent in Q1.

“As the extraordinary circumstances of 2020 drove the trend towards digital financial management we continued to innovate for customers to make their financial lives easier and accelerate daily use,” said Nikolay Storonsky, founder and CEO of Revolut.

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Expansions 

The UK startup expanded aggressively in 2020. It entered the United States, Japan, and Australia, and also launched banking services in Lithuania. But the United Kingdom still remained its dominant market generating 88.4 percent of its revenue, while 10.2 percent came from the European Economic Area.

Storonsky further said that COVID-19 implications have forced the startup to focus on profitable areas like cryptocurrency and stock trading. But Revolut’s cards and interchange business generated the highest revenue of £95 million, followed by £80 million from forex.

The startup also revealed that it had 14.5 million personal customers and 500,000 business customers by the end of 2020. Further, Revolut reported that its revenue and gross profit for Q1 2021 increased by 130 percent and 300 percent, respectively, year-over-year.

“Revolut entered its next phase of growth in 2020 as we broadened our global footprint, strengthened our capital base, enhanced governance, and bolstered executive management,” said Revolut Chairman, Martin Gilbert.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.financemagnates.com/fintech/news/revolut-losses-deepen-in-2020-despite-57-revenue-jump/

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Blockchain

Things Are Getting Worse For ETH As It Drops Below $2000

Things are getting worse for ETH as it drops below the $2000 price point on several major exchanges as we can see more in our latest Ethereum news today. Ethereum dropped below $2000 for the first time in a month and the HODLers hoped that today’s pullback will not signify the start of a longer-term […]

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Things are getting worse for ETH as it drops below the $2000 price point on several major exchanges as we can see more in our latest Ethereum news today.

Ethereum dropped below $2000 for the first time in a month and the HODLers hoped that today’s pullback will not signify the start of a longer-term bear market and the world’s second-biggest crypto by market cap dropped briefly below $2000 before it became accustomed to the price back in April and then again in May but each dip lasted for a few hours. Launched at the end of July 2015, Ethereum popularized the smart contract and enforced financial contracts executed on the blockchain so from smart contracts came to NFTs as the unique cryptocurrencies based on ethereum, starting a new craze that helped ETH to rise to $4100 this year.

eth chart
ETH 24/7 CHART BY COINGECKO

Non-fungible tokens are a very popular way to sell digital art since each token is one of a kind and we saw Beeple selling a collection of JPEGs as an NFT for $69 million this year. The bull run, Ethereum’s smart contracts spurred the developments of the Decentralized Autonomous Organisation, and the DAOs use automated decision-making processes as well as smart contracts to allow the group of people that remain anonymous to govern themselves like real organizations.

Even though scammers drained the original DAO out of $55 million in 2016, DAOs are the main thing for decentralized finance now. Polychain Capital CEO Olaf Carlson-Wee estimated that the DAOs raised major breakthrough in blockchain after digital cash. Ethereum 2.0 is expected to drop this year and the upgrade promised low fees, fast transactions processing, and a reduction in the overall energy requirement by more than 99% as the network moves to a greener proof of stake model. Even if things look bleak, Ethereum’s history proves that it is still an invaluable part of the diversifying crypto-verse.

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Ethereum’s London Hard Fork, eth, eip-1559

However, things are getting worse for ETH as the coin dropped below $2000 as the entire market did as well. As we reported recently, After a few days of adverse price developments, BTC calmed down at $33,000 while most alternative coins continued registering price losses with ETH sliding to $2200 again and XRP dumping more than 5% in one day. The workweek was going in BTC’s way for a few days as it spiked above $40K to a new 26-high at $41,375 as the community started preparing for a new leg up that can take the asset to $50,000 or higher while the bears regained control and BTC started losing.

DC Forecasts is a leader in many crypto news categories, striving for the highest journalistic standards and abiding by a strict set of editorial policies. If you are interested to offer your expertise or contribute to our news website, feel free to contact us at [email protected]

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.dcforecasts.com/ethereum-news/things-are-getting-worse-for-eth-as-it-drops-below-2000/

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Blockchain

U.S. Bitcoin Mining Firm Pioneers Alternative Flare Gas Energy

With the spotlight shining strongly on Bitcoin’s energy usage and environmental impact, mining firms are innovating new ways to harness renewable power to produce the next block.

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Denver, Colorado-based Crusoe Energy is capturing the energy from flare gas at oil patches and using it to mine Bitcoin.

The firm is now one of North America’s biggest BTC miners and has attracted investment from Coinbase Ventures and the Winklevoss twins, according to a recent report.

Renewable Bitcoin Mining

Crusoe claims that its system can slash the CO2-equivalent emissions from gas flaring by up to 63% and that each one has the equivalent effect of taking around 1,700 cars off the road.

The system works off the oil drilling industry, which often results in the discovery of natural gas in the wells. Drilling companies lack the infrastructure to sell the gas and so burn it off in a process called flaring.

Crusoe installs a piping system to divert the natural gas away from the flares and into generators, which in turn produce electricity that is used to power Bitcoin mining hardware. Crusoe Energy president Cully Cavness stated:


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“We pay the operator for the gas that we use in our generators, providing them with an incremental revenue stream where they were previously flaring the gas for zero,”

The firm has deployed the system in North Dakota, Colorado, and Montana, among other states, is now one of the biggest Bitcoin miners in North America.

The search for renewable Bitcoin mining has intensified since Tesla CEO Elon Musk commented on the environmental impact of using fossil fuels to power the process.

The Lone Star State of Texas has also become a mining mecca due to its abundant, low-cost renewable energy, most of which is wind or solar power.

Sichuan Miner Crackdown

The crackdown on Bitcoin mining in China is continuing, with more operations in Sichuan province powering down over the weekend. The move was noted by industry insiders who also commented on the BTC hashrate plunge.

The great mining migration was accelerated last week following a crackdown in Yunnan province, and now Sichuan has followed with orders from the Beijing regime. BTC hashrate has dropped to its lowest level since early November 2020, falling to 91 EH/s according to Bitinfocharts.

Bitcoin price has also taken a hit over the weekend with a fall from $36K to $34K. At the time of press, BTC was trading down 3.4% on the day at $34,530, according to CoinGecko.

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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptopotato.com/u-s-bitcoin-mining-firm-pioneers-alternative-flare-gas-energy/

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Blockchain

$1 Billion in Liquidations as Crypto Markets Lose $120B in a Day

The crypto market has faced another volatile trading day, and the total liquidations have jumped to roughly $1 billion.

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The total liquidations in the cryptocurrency market have reached $1 billion as all assets have dumped in a matter of hours. Following new FUD from China, bitcoin slumped to a two-week low at just over $32,000, ETH below $2,000, and so on.

  • After the somewhat positive weekend when BTC recovered some losses and traded at $36,000, the situation reversed quite rapidly.
  • As CryptoPotato reported earlier, China’s third-largest state-run bank, the Agricultural Bank of China, said it had banned its customers from interacting with cryptocurrencies.
  • As has happened on previous occasions when the world’s most populated nation displayed its negative stance on crypto, the market started to tumble.
  • As a result, bitcoin dumped to a two-week low of just over $32,000. Most alternative coins followed with even more violent retracements.
  • Ethereum plummeted by nearly $300 in a matter of hours to below $2,000. As such, the second-largest crypto dropped below that coveted level for the first time in almost a month.
  • With most of the altcoins performing in a similar manner, the cumulative market cap of all digital assets lost over $120 billion in hours.
  • Somewhat expectedly, the enhanced volatility in a relatively short period has caused massive pain for leveraged traders.
  • According to Bybt, the total liquidations have skyrocketed to roughly $1 billion in the past 24 hours. Although BTC trades are responsible for more than 50% of the entire number, the largest single liquidation came from EOS.
  • The unfortunate trader has lost more than $6 million on Huobi as the price of EOS slipped by 15% in a day.
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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptopotato.com/1-billion-in-liquidations-as-crypto-markets-lose-120b-in-a-day/

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