“To objective observers, the network’s momentum was clear despite the bearish price action; those predisposed to dislike based on perceived vested interests, were blinded by biases & missed the bus. What happened to $BTC then is happening to $ETH now.”
Ether price chart, July 2018-August 2019. Source: Coin360
Bitcoin price chart, July 2014-April 2015. Source: Coin360
Bottleneck issues “not solved at all”
Parallel to Burniske’s comments on Ether’s price action, the founder of top crypto exchange Binance, Changpeng Zhao, also known as CZ, picked up on the ongoing debate sparked by Vitalik Buterin’s statement this week that the Ethereum blockchain is almost full. CZ tweeted on Aug. 21:
“I like Vitalik & ETH, but speed & capacity was a problem a year ago, but now a largely solved problem for newer blockchains (for now). We need to increase real applications that people actually use, so that we hit the new capacity issues/limits again. Focus on applications.”
In response, Buterin said that scalability issues are “not solved at all,” noting that even the newer semi-centralized blockchains can only process transactions p/second in the hundreds. EOS, for example — he claimed — has already faced scalability bottleneck issues.
The Ethereum co-founder also conceded he was becoming more and more pessimistic about off-chain second layer solutions such as Lightning Network — a scalability solution for Bitcoin which opens payment channels directly between users that keep the majority of transactions off-chain. Thus, the underlying blockchain is only used to settle the net results.
Buterin argued that second-layer solutions are “hard to build, require too much application-layer reasoning about incentives, and hard to generalize.”
Technicals and price
Despite Ether’s latterly bearish fortunes, the results of a recent survey of the global crypto Twitter community indicated that 54% of respondents believe Ether will see $1,000 again.
That optimism continues to be tested: in the depths of crypto winter Fundstrat senior analyst Tom Lee made the ill-fated call that ETH/USD would rally to $1,900 by the end of 2018.
Meanwhile, Buterin’s recent remarks indicated that with scalability still as thorny an issue as ever, the pressure of high transaction costs and the squeeze for transaction space is keeping new partners from joining the network.
To press time, Ether is trading at $188, down 4.8% on the day, according to CryptoX’s Ether Price Index.