Bitcoin which yesterday broke through the wall of 35000 dollars in Luxembourg. But it is not the only currency to break records. Regarding the phenomenon of cryptocurrency growth, we publish a commentary regarding The Ethereum record by Jamie Finn.
Finn is president and co-founder of Securitize. Founded in 2017, it is one of the largest players in the industry for digital securities. We thank him for his answers that serve to shed further light on the momentum of virtual currencies. Ethereum touched $1161 (no happened since January 2018), and then repositioned itself around $1000.
Ethereum record according to Jamie Finn
Is it more speculative investment, or is ETH actually getting more usage?
“It is getting more usage but with this speculation you will have many developers search for another chain since its getting too expensive to process a transaction. Right now it costs $17.00 to process a transaction which is untenable for most people unless you are using it for large transactions”.
Could you give us an example?
“If you want to get generate yield you would need to spend $17 to get into the deal and then you are basically starting out at -$17 which is fine if you are deploying $100,000 but most people are only deploying $100-$1000 which means the yield is negative for a long time. As an example if you were to invest 1 ETH a UNISWAP pool you would paying $75 in fees right now into”.
What of Ethereum’s scalability issues? Is that a matter of concern at this point?
“The current issues are more related to costs as opposed to scalability – that said if the network scaled further perhaps the costs would drop further but that remains to be seen”.
What will the Ethereum network look like in a year in terms of usage in the best-case scenario?
“In our best case we would like to see ETH drop to $200-$300 per coin and get more capacity into the network so that developers and users can use the network in a way where the fees don’t exceed the benefits”.
What is the overarching problem with the status quo?
“Fee based networks such as Ethereum have the wrong economic model when you compare it to traditional economic models — as things currently get more expensive to use the more they are used — which is the opposite of what would be expected with an economy of scale where transactions get cheaper as things scale up. The inventive model on ETH is broken and needs to evolve”.