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2020: Make or break year for Ethereum

Photo of: Nathan VDH
by Nathan VDH

The year 2020 was awaited by the many fans of Ethereum, the second cryptocurrency in the world. With the arrival of Ethereum 2.0 in particular, the year promised to be quite exciting and lucrative. While the version 2.0 is still pending, the Ethereum is much talked about for the very significant variations of its course. A look back on the last crazy weeks of the Ethereum.

With the COVID-19 crisis taking its toll, cryptocurrency (and stock) prices collapsed in March 2020. Ethereum was no exception. However, its price recovered quickly and began a slow but robust recovery. Then, from July 20, 2020, everything went crazy.

Since the exponential but ephemeral price increases in January 2018 and May 2018, the $300 threshold has become the de facto most important resistance value of the Ethereum share price. After crossing this threshold in July 2019 and again in February 2020, the share price immediately collapsed.

However, from July 20, 2020, Ethereum started a relatively sharp rise. Its price successfully crossed the famous resistance value of $300. On 1 September, a peak was even reached at around $470. Since then, the price has fallen but has stabilized above $300. In total, between July 1 and September 1, 2020, the ETH share price rose by 93%.

Ethereum 2.0, the main challenge in 2020

The year 2020 still holds a few surprises for ether investors. Indeed, Ethereum 2.0 is still to come. As a reminder, the main change expected with the arrival of Ethereum 2.0 is the adoption of a new validation method, the Proof-of-Stake.

In the opinion of its founder, Vitalik Buterin, the transition to Ethereum 2.0 is “harder” than imagined. The resources needed for the evolution of the ecosystem to this new level are considerable. So much so that some voices are being raised in the cryptosphere. Some believe that it would be easier to create a new project altogether rather than trying to make this complex transition work.

However, the tests are ongoing and are quite positive. Ethereum 2.0 would therefore only be a matter of time. In August 2020, the last test phase of ETH 2.0 was successfully launched. Called Medalla, this test was a full-scale simulation involving 25,000 users and 1 million (fictitious) ETHs.

It remains to be seen whether Ethereum 2.0 will live up to its promise. The adoption of version 2.0 is crucial for the survival of Ethereum and its adaptation to new issues. Faced with a booming decentralized finance (DeFi), Ethereum must adapt its process to meet the demand. Finally, Ethereum 2.0 will have to reassure doubters that this is a true upgrade. Recently, analyst Eric Wall has caused a real outcry by stating that Ethereum 2.0 is vulnerable to 51% attacks. To which Vitalik Buterin hastened to reply that the adoption of Proof-of-Stake was precisely the best way to protect against this type of attack…

All in all, 2020 has been and will be a decisive year for Ethereum and Ethereum 2.0 will certainly be a new chapter in this story, either fantastic or catastrophic.