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Ethereum (ETH) has an Uncertainty Problem, Will this Affect Price?

Ethereum ETH

Ethereum’s long-term plans may be grand, but one big problem facing the first smart contracting platform—a big impediment for investors, is uncertainty. This is the view of an optimistic ETH investor who, while confident of platform developers, is unconvinced of how improvements are being implemented.

The Problem is Uncertainty During Transition

According to one Twitter user, it is imperative that the path towards Ethereum’s future is clear and based on a predictable path especially now when its main use case is the rapid development and proliferation of Decentralized Finance (DeFi).

“Although I am bullish on ETH, my major bearish view for Ethereum is uncertainty. Investors want to invest based on clear and predictable information. The upgrade to Ethereum 2.0 is causing significant uncertainty for the most important use case in Ethereum: DeFi.”

This way, investors would know of what lies ahead, plan, and in a case of any eventuality, shield their positions.

“I like the Ethereum 2.0 plan and who how smart and hard-working are the teams implementing it, especially Prysmatic, but the design and specs keep changing and deadlines are pushed back every time. If we are honest, Ethereum 2.0 is an overhaul not just an upgrade.”

The Difficulty Bomb

In the last month, Ethereum was forced to execute an urgent software upgrade because for some reasons, developers forgot to postpone the Difficulty

Adjustment during the execution of the Istanbul hard fork. The Istanbul fork was also not short of controversy thanks to EIP-1884.

Through the Muir Glacier adjustment, the problem of a slow network and blocks taking longer to process was rectified. Before this, it had been observed that block processing had increased from 3 minutes to over 20 minutes, a substantial lag.

The Difficulty Bomb is specifically in place to ensure that Ethereum doesn’t fork when they are in the middle of their transition from Proof of Work to a Proof of Stake consensus algorithm.

The Difficulty Bomb automatically re-adjusts increasing the mining difficulty, meaning it will be more difficult for miners to earn ETH. This way, block processing time will take more time, slowing the network.

The post Ethereum (ETH) has an Uncertainty Problem, Will this Affect Price? appeared first on Coingape.



Source: Ethereum (ETH) has an Uncertainty Problem, Will this Affect Price?

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