Ethereum’s [ETH] token will likely become worthless in the future, but the Ethereum network will end up succeeding “wildly”. This forecast was made by Stellar technical advisor Jeremy Rubin in a TechCrunch article.
“ETH — the asset, not the Ethereum Network itself — will go to zero,” Rubin, who is also a Bitcoin Core contributor and an investor in early-stage crypto start-ups, wrote.
Many in the crypto community believe the coin will not see real adoption on account of its scalability issues, failure to adopt more secure contract authoring practices, or inability to out-compete its rivals.
Ethereum network and ETH fees
Ethereum network is a decentralized platform, on which applications can be built using smart contracts. The network limits downtime, censorship, fraud or third party interference.
Because of the blockchain technology, developers can create markets, store registries of debts or promises and move funds according to instructions given in the past (such as a futures contract) – all without a middleman or counterparty risk.
All these features are enlisted in the company’s website as Ethereum’s value proposition. If the networks fulfils this proposition, external risk factors can thus be mitigated for decentralized apps.
The website, however, does not include a value proposition for ETH.
All the features in the Ethereum network can be unlocked by paying ETH fees, or what the crypto community refers to as ‘Gas’.
Simply put, if you pay more gas fees, your transactions will be carried out faster. However, there is no hard requirement for gas in an Ethereum contract.
For example, if you were building a decentralized app, every transaction on the app would require gas fees, paid in ETH. Now, instead of paying for gas in each transaction, the app could pay for gas in a non-ETH asset, which is referred to as economic abstraction in the Ethereum community.
This means that for every transaction, developers could make every transaction carried out on the app deposit a small amount of the app’s digital asset directly to the block’s miner’s address as payment to execute the contract.
In this way, the app would no longer be functionally dependent on ETH.
Why ETH can be easily replaced
Now if all such apps and their transactions can run without ETH, there is no intrinsic value to the coin. ETH can be valuable if miners push for fee payments to be made in the virtual currency. This is unlikely since miners generally prefer to be paid in their preferred assets rather than in ETH.
Moreover, users who tend to avoid risk would want to minimize their exposure to volatile coins that they don’t have to use. In addition, developers of new altcoins would benefit from replacing ETH since pricing in their native asset would help in reducing sell-pressure.
To sum up, replacing ETH would benefit all parties, except for existing ETH holders.
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