Ethereum is one of the greatest technological innovations of the 21st century. Its versatility in a wide variety of applications, from financial services transactions to digital ledgers in many industries, has made it one of the most important tools driving digital transformation. In recent years, however, Ethereum has become much slower and more expensive than it once was. It can take hours for a transaction to be processed over the network, and the cost per transaction (or gas fees) can be as much as $ 40.00.

With the emergence of Ethereum-based NFTs taking the art and music world by storm, demand will only increase, further increasing gas prices and transaction processing times. This trend begs the question “should companies give up Ethereum and find an alternative way to process their transactions?” There’s no denying that Ethereum has surpassed expected demand, but that doesn’t mean it can’t outperform other options for businesses. Let’s take a closer look at the major issues with Ethereum, why we shouldn’t give it up, and how to make it work in a way that’s fast, scalable and, crucially, cost-effective. These points have a major influence on the Ethereum price forecast.

The problems with Ethereum

One of the most common misconceptions about public blockchains, especially Ethereum, is that it is a less secure or more vulnerable solution than, say, a private network. The reality is that Ethereum is very secure – much less hackable than a cloud server, as it is all open source and publicly validated around the world. The real problem with Ethereum is in the bandwidth.

When developers first laid the foundations of what has now become the largest public blockchain protocol, there was no way they could foresee the magnitude of the demand for Ethereum. At its peak, Ethereum transactions can reach more than 1.4 million in a single day. While this pales in comparison to something like the Visa card payment network, which passes more than 65,000 transactions per second, stock Ethereum has a hard ceiling. In theory, the network can only support about 2,592,000 transactions per day.

It’s not just about the high gas prices when it comes to the cost of Ethereum transactions – it’s about price inconsistency. The gas price at any given time is determined by the demand for the network. As such, at different times of the day or around certain dates, the volume of transactions passing over the network fluctuates significantly. This makes it nearly impossible to predict how much each trade will cost and predict your total cash flow.

For example, say you run a credit card cashback program where you use Ethereum stock to process your transactions. If one of your partner retailers offers 10% cash back on all purchases, each purchase will consist of a transaction where you bill the retailer for 10% of the purchase, and another where that 10% is refunded to the customer. Depending on the time of day, these trades can cost anywhere from $ 0.20 to $ 40.00 – having a huge impact on the profitability of your business.

Why keep Ethereum?

For many applications, Ethereum is by far the best option, despite the issues outlined. An Ethereum blockchain solution can be built, deployed, and run indefinitely without any downtime, low risk of fraud, and no interference from malicious parties.

When you think about what Ethereum enables a company to do, it is clearly superior to any non-blockchain solution for applicable use cases. At the heart of Ethereum for Business is the smart contract – pieces of code that run automatically when a set of predefined requirements are met. If you apply that to our cashback example, it means in very simple terms that when a customer makes a transaction, a requirement is met that automatically bill the retailer 10% and the customer pays their cashback. Cryptocurrency Italy is popular.

If you were to run this framework on a private ledger in the cloud, there would be no easy way to automate this process. If you wanted to set up a permission network of any kind, you would either have to do it yourself by hiring an expensive team of developers and experts, pay a huge amount to a major software company to develop it, or simply an out- Using the-box software solution that is robust and well established, but may not provide all the functionality you need.

It is crucial if you don’t like the whole Ecosysteem, Ethereum has it automated. Ethereum is an open public network that has been tested for combat for years, and is inherently more secure than any private network, and can be extremely versatile. It can be designed to work in a range of applications.

Fundamentally, it is this flexibility and versatility that has led to the major problems associated with Ethereum. It used to be called “great for microtransactions” – today that is no longer true, as so many people use the network for an unattainable range of applications – big and small.

How can Ethereum still work?

If Ethereum didn’t work extremely well, gas costs would simply have dropped over time as companies and projects turned to alternative options. This has not been the case – the value of Ethereum remains evident to many different organizations. The question is, how can people still use Ethereum despite the problems outlined, and how many of these problems can be eliminated in the future?

There are two main streams when it comes to making the network future-proof. The first is Ethereum 2.0 – a significant update to the way Ethereum functions that promises to increase bandwidth and lower gas costs. Ethereum 2.0 is currently being tested with the “Medalla Testnet”, involving more than 20,000 validators worldwide. However, the new Ethereum is plagued by slowdowns and setbacks – the main network should have gone live last year.

One of the many concerns within the developer community is the security of Ethereum 2.0, and whether it is scalable enough. The testnet points towards 2.0 being able to reach about 3,000 transactions per second – much better than Ethereum 1.0’s 15, but still nowhere near Visa’s 65,000.

The second school of thought is that of the Layer 2 solutions. These are solutions designed to solve problems with stock Ethereum by making transactions outside of the Ethereum backbone, while still taking advantage of the many benefits that Ethereum has to offer. These have the ability to solve many of the problems with Ethereum – from gas costs to speed and scalability.

Numerous Layer 2 solutions are available for organizations. The most important thing for any business that wants to use a Layer 2 solution is to judge what exactly they want to achieve. The best-in-class Layer 2’s can completely overcome cost, speed and scalability issues, and make Ethereum run efficiently and indefinitely for any use case. Germany cryptocurrency website is popular.

The future of Ethereum

Without a doubt, Ethereum expectation has incredible potential – there is really no other solution that offers such a toolkit of features. As the blockchain space expands, it is critical that the market continues to seek creative ways for the technology to be applied and bring value across industries. Then, as an industry, we can expand the capabilities of Layer 2 solutions to close all existing gaps and build a more solid foundation for a wide variety of applications.