Ethereum/ether is a native coin of the ethereum network. As a native coin of the Ethereum network,ether can be transferred from one smart contract address to another where the transaction will reach the second smart contract address upon being verified by the miners running the network provided that the first smart contract address pays the miners fees. Several miners can delegate their computing power to few mining pool so that in return they receive reward in form of mining fees charged for validating transaction as well as new ether coin mined . This makes it to be using a proof of work consensus. In this year, 2020, the ethereum network managed to change its consensus from a proof of work to a proof of stake thus allowing stakers to be able to stake their ether to few staking pool such as https://ethstaking.io/ and https://www.rocketpool.net/ thus in return you earn reward of up to 6% per anum or above in form of new coin minted and transaction fees charged for validating transactions on the ethereum network. In late 2015, one ether was going for around $0.4. Towards the beginning of 2016, the price managed to go as high as above $1 after which it managed to go above $10 again as 2017 was starting. As 2017 was winding up,the price had managed to go as high as above $700. As 2018 was starting,the price managed to go as high as $1300 thus profiting those early miners who were still holding their ether by that time. In 2018,the price went as low as $80. Currently, one ether is trading at around $250. The increase in price was due to an increase in the number of miners leasing their computing power so that it can be used by several mining pool to validate transaction taking place at the ethereum network. The decrease in price again was due to the dumping of ether to several exchanges by those miners who wanted to profit from the rise of the price. Since ethereum has managed to change its consensus from proof of work to proof of stake, we will therefore further explain its price prediction based on proof of stake consensus as follows
Proof of stake consensus
When ethereum was launched ,it was using proof of work consensus where miners could lease their computing power to several mining pool to use it to validate any transaction taking place on the ethereum network thus in return they receive reward in form of miners fees charged and new coin minted . In 2019, a new proposal was made by Vitalik to transform the network to a proof of stake consensus since it is cheaper as compared to proof of work consensus. Currently, ethereurm network uses proof of stake consensus which was implemented towards the beginning of 2020. In proof of stake consensus, the stakers will lease their coin to few ethereum staking pool who will use them to secure the ethereum network as well as to validate transaction taking place on the ethereum network. Although ethereum is an already established network, we will still explain its price analysis based on proof of stake consensus. If more stakers will lease their ether to the staking pool, then the ether will become inefficiency on the ethereum network thus creating its demand. This will result to an increase in its price. On the other hand, if few coins are being staked to the staking pool by few stakers, there will be surplus of ether on the ethereum network thus its price will decrease. The 2021 future price prediction for ether can further be explained based on bullish and bearish condition as follows;
1. Ethereum bullish condition based on the consensus used
In a bullish condition, the ethereum coin will be considered to be moving in an upward market direction. In 2015, one ether was going for around $0.4. 3 years later, the price managed to go as high as $1300. This increase in price was due to an increase in the number of miners leasing their computing mining power to be used to secure the ethereum network as well as to validate any transaction taking place on the ethereum network. The price then decline to $250 and has managed to maintain that trend. This decrease in price was due to the dumping of ether coin together with the reward by early miners so that they can profit from the increase in price.Currently, ethereum network was able to transform from proof of work to proof of stake consensus. Therefore, the future price will be determined by its proof of consensus rather than proof of work consensus.In one year time from now, if more stakers will join the ethereum staking program by simply leasing their ether coin to few staking pool,then ether coin will become inefficiency in its ethereum network thus its demand will increase thus causing its price to also increase all the way to around $300. The analysis of ether coin based on the consensus used is further being indicated as from the candlesticks chart below;
The above chart represents the 2021 future price prediction of the ether coin. Two points are being indicated. There is point A and point B. Before point A, the price of ether coin can be seen to have been rising all the way to $266. This increase in price has been due to an increase in the number of stakers leasing their ether coin to few staking pools available thus causing an inefficiency of ether coin in its network. This inefficiency is what results to an increase in its demand thus causing the price to go as high as $266 as indicated above. Some stakers then unlock their ether coin together with their earned ether interest and dump them in several exchanges thus causing the price to slightly dropped to point A at $256. Some more stakers then continue to join the staking program by leasing more of their purchased ether coin to few staking pools thus causing the price to rise again to point B at above $266. In one year time most probably 2021, if more stakers will continue to join the ether staking program due to an increase in its reward, then the price will continue to rise to above point B. As 2021 will be starting, there is possibility of the price of one ether to go all the way to $300. For investors, this is the right time to purchase ether coin so that you can profit in 2021.
2. ether bearish condition based on the consensus used
In bearish condition, the ether coin will be considered to be moving in a downward market direction. In 2015, one ether was going for around $0.4. 3 years later, the price managed to go as high as $1300 . This increase in price was due to an increase in the number of miners leasing their computing mining power to be used to secure the ethereum network as well as to validate any transaction taking place on the ethereum network . The price then decline to $250 and has managed to maintain that trend. This decrease in price was due to the dumping of ether coin together with the reward by early miners so that they can profit from the increase in price.Currently, ethereum network was able to transform from proof of work to proof of stake consensus . Therefore, the future price will be determined by its proof of consensus rather than proof of work consensus. In one year time from now, if the staking reward will decline then more stakers will also exit the staking program thus causing the ether coin to become surplus in the ethereum network. This will result to a decrease in ether demand thus causing its price to decline. If this is bound to happen though i am bullish for ether, then there is possibility of ether to be worth at around $200 in early 2021. Here is an analysis of ether coin based on bearish condition
The above chart represents the future price prediction of the ether coin. Two points are being indicated. There is point A and point B. Before point A , the price of ether coin can be seen to have been declining all the way to $256. This decrease in price has been due to an increase in the transaction cost thus causing many Dapps to shift to other network. This result to a decline in the staking reward program thus causing many stakers to unlock their staked ether coin together with their reward and dump them in several exchanges. This dumping is what result to a decline in price to $256 as indicated above. Some existing Dapps then purchase the ether coin so that it can be used to perform several functions in their Dapps like paying their users and paying for transaction cost. Because of this,the price slightly rises to point A at $266. The ethereum network platform further increases the transaction cost in their network thus causing more Dapps to continue to exit the platform due to a decline in their revenue. Because of this, more stakers continue to unlock their coin together with their reward due to a decline in the staking reward and continue dumping them in several exchanges thus causing the price to further decline all the way to point B at below $256. In one year time,that is in 2021, if this will continue to happen,then the price can go as low as $200. I am not bearish for ether coin but if you are bearish and think this can happen, then you can sell them at current market price if you are holding them.
Summary
Ethererum network has been using proof of work consensus since 2015 all the way to 2019. In 2020, it was able to transform from proof of work consensus to proof of stake consensus due to high expenses incurred from electricity in the proof of work consensus. The price of ether was able to go as high as $1300 from $0.4 but later dropped to $250 where it has managed to maintain at around that level. The increase in price has been due to an increase in the number of miners who later dumped their ether coin in several exchanges in order to profit from the increase in price thus causing the price to drop again to around $250. In 2020, ethereum network was able to transform from proof of work consensus to proof of stake consensus thus its price prediction in 2021 will be based on proof of stake consensus. Therefore, we can say that as more stakers lease their coin to few staking pools to use them to secure the ethereum network as well as to validate any transaction taking place on the ethereum network,the price will increase due to an increase in the demand of ether while if more stakers who had previously leased their ether coin to few staking pool to use them to secure the network unlock them and dump them to several exchanges due to a decline in the reward ,the demand of ether coin will decline thus causing the price to decline. In early 2021,I am bullish for ether coin thus would suggest to buy. I am not bearish for it.