Cryptocurrency News

ConsenSys CEO: Following the London Hard Fork we can Expect an ‘Enormous’ Increase in Demand for Ethereum

By July 19, 2021 No Comments

Key takeaways:

  • The London hard fork is coming on August 4th and is bringing fundamental changes to the platform as the burning of Ether will be introduced, essentially making it a deflationary currency.
  • By the end of 2021 or the beginning of next year, as a part of the Ethereum 2.0 upgrade, there will be a transition from PoW to PoS consensus mechanism, making Ethereum much more efficient and less energy-consuming
  • Demand for Ether is increasing while there are fewer tokens available to buy due to staking and tokens being locked into various DeFi services, which will push the value of Ether way up.

Ethereum is among the quickest developing blockchain platforms in the world. Thanks to a very engaged community and a talented team of experts, the network has been receiving a steady dose of new upgrades since its inception in July 2015. The latest in the line is the London mainnet upgrade, which is scheduled to go live on August 4th.

ConsenSys’ Joseph Lubin is very bullish on Etherum, predicts a massive increase in demand and value of Ether

In an interview with CNBC, the CEO of ConsenSys explained how exponential growth for Ether token is very likely and will initially be triggered by the London fork. According to Lubin, the London hard fork will play a pivotal role in the short term. The new upgrade is coming in a couple of weeks and will introduce the burning of Ether, essentially making it a deflationary currency.

On a little longer timescale, sometime in December of this year or January 2022, Ethereum will transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS) consensus mechanism, making Ethereum much more efficient and less energy-consuming. The transition will occur once the Ethereum 2 upgrade rolls out. Initially, the original chain will continue to operate uninterruptedly, only the consensus mechanism will be replaced.

Ethereum 2.0 upgrade will be a complete game-changer

The ‘2.0’ upgrade will introduce PoS and bring massive improvements in the speed and throughput of transactions via sharding. It is not surprising that the public’s interest in the new upgrade has been building up over the years since the roadmap to the ‘2.0’ upgrade was first announced.

Lubin points out that are already millions of Ether already staked in Ethereum 2. In addition, approximately $60 billion worth of Ether is locked in various decentralized finance (DeFi) protocols. 

“We are seeing exponential demand for Ether token to run transactions, to run programs on the network, on top of essentially massively decreasing supply. So we anticipate there will be an enormous run-up in demand and the value of Ether.”

– Joseph Lubin, CEO of ConsenSys

The result of the recent developments and upcoming changes is the shrinking Ethreum monetary base. While the demand is increasing due to the investors’ excitement for new upgrades, there are fewer Ether available. Furthermore, the supply will decrease even further once the burning of Ether is introduced.

The reason why the price of Ethereum has not yet responded to the developments is due to holders moving their funds to stablecoins. Lubin’s theory is supported by data as there is increased demand for stablecoins pegged to USD on the ETH platform. Once the London fork rolls out, the disparity between the low price of Ether and the overall high interest should slowly dissipate.