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The Ethereum network is well poised to be the first cryptocurrency network to process US$1 trillion in transactions by the end of 2020.
The potential of the Ethereum network to hit this milestone was revealed by the cryptocurrency market data aggregator Messari who noted that the network’s 30-day rolling daily average for Ethereum transaction volume is currently at $7 billion. Should the momentum be sustained, Messari believes that the network will eventually process up to US$1 trillion in transactions this year.
As stated by Messari’s Ryan Watkins, “Ethereum’s progress has been so incredible that it will likely become the first public blockchain ever to settle $1 trillion in a year.”
Ethereum’s progress has been so incredible that it will likely becomes the first public blockchain ever to settle $1 trillion in a year. pic.twitter.com/2TsU8GbPJk
— Ryan Watkins (@RyanWatkins_) October 21, 2020
Ethereum has undoubtedly trailed Bitcoin as both digital currencies have occupied the top two positions amongst other cryptocurrencies and analysis of Messari’s transaction volume between the two coins shows that should the predictions be correct, this year would be the first time the Ethereum network will surpass that of Bitcoin.
The total transaction volume on the Ethereum network back in 2016 was $7 billion while Bitcoin’s closed at $88 billion. Both networks experienced relative growth in 2017 with total transactions on the Ethereum network topping $360 billion and Bitcoin transaction $685 billion. Apparently, the Bitcoin network had its highest transaction volume to date in 2018 when it recorded a total of $849 billion dollars. From the projected 2020 figures, Ethereum is expected to surpass bitcoin in total transactions while bitcoin will see its second-highest volume recorded at $800 billion.
Ethereum Transactions Surge, Factors Behind the Rally
Messari has attributed the surge in the transaction volume of Ethereum to the surge in the use of Stablecoins as well as decentralized finance (DeFi) applications running on the Ethereum Network.
“Much of this activity is attributable to Etherum’s stablecoin volumes. Tether alone now transacts more daily than Bitcoin. Most of this volume is ERC-20 Tether,” Watkins tweeted, adding that “the second leading reason for this is Ethereum’s boom in on-chain liquidity. Uniswap and Curve did more than $20 billion in combined volume for September. DEXs now comprise 13.6% of total volumes from all exchanges both centralized and decentralized.”
The activity boost as a result of the Stablecoin and DEXs is already seeing perpetual competition from alternate networks that seek to capitalize on the loophole of the Ethereum network particularly as it relates to scalability. The ethereum foundation is already working on turning this obvious weakness into strength with the almost perfected plan to migrate to a Proof of Stake (PoS) mechanism dubbed Ethereum 2.0.
The prospect of this migration has been reiterated and besides scaling up from the current 15 transactions per second, with the PoS, it will be able to perform as much as 100,000 transactions per second. With this capability, the network will undoubtedly attract and accommodate more ERC20 tokens as well as Dapps.