Ethereum is still the most successful altcoin after Bitcoin in terms of market capitalization. At the end of 2020, Ether started a brilliant rally that continued into 2021. With an all-time high beyond 1,600 euros, ETH made a huge impression on the market, as many market observers had not expected it.
What can we expect from Ethereum in this still very early year of 2021? In today's article, we address some future questions.
Ethereum more popular than ever before
The Ethereum blockchain is enjoying a popularity in 2021 that is beyond anything that has been seen before. The main factor behind this development is Decentralized Finance (DeFi) and Non Fungible Tokens (NFT). Both factors are bringing new products to the Blockchain and opening up completely new digital industries.
DeFi is providing new protocols in DEX, lending and even insurance that could shake up the traditional financial market. And NFTs are also celebrating an unimagined triumph. Not only because they bring art to the blockchain, but also because they can be used to turn trading cards or items in online games into unique items, for example.
The markets that Ethereum is targeting are huge. Still, it cannot grow fast enough because the blockchain won't scale.
Ethereum 2.0 is a long time coming
In December 2020, the so-called Beacon Chain signalled that enough support for ETH2 exists and the new blockchain was launched. This year, we can look forward to seeing how this exodus to the new chain will play out. It will probably take two to three years before everything is fully completed.
Valuable time that is actually missing because the market demands a scalable solution. The consequence is that Ethereum is very expensive in its current state, considering the fees. This year, we are expected to see the first Shard Chains. A total of 64 Shards are expected to see the light of day in 2021.
These will not yet be able to execute code then, but will initially serve as data storage. The idea is that these shards are connected to the actual Ethereum blockchain to make the network more scalable overall.
In the end, the so-called docking still has to be completed. It would be a big surprise if we can expect this before 2022. Since ETH1 and ETH2 are separate blockchains, the old mainchain is to be docked as a shard in this step. It will therefore remain to be seen in the coming months how the first shards will perform in practice.