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Ethereum had a tough time in 2023, dealing with considerable external pressures from regulatory authorities, as well as the collapse of exchanges and crypto-friendly banks that rocked the digital money environment to its core. Binance data shows that the coin has regained much of its former strength over the past couple of months, but a lot of work remains to be done. As Ethereum continues to recover bit by bit, here are some of the most critical changes in the system that could mean prices will continue to change.
Censorship
The cryptocurrency world is best known for being a fully decentralized environment. That means that no single person or company owns all the data; instead, it is distributed across the different nodes in the system. In light of the recent talks about imposing stricter regulations on blockchains, many investors have discussed the possibility that this is the beginning of the end for the decentralized ledger. Many traders believe that the only reason regulations would ever be enforced is to keep the system under control and switch it to a more centralized model.
Some are concerned that these shifts have already begun to happen for Ethereum. The US government recently sanctioned an Ethereum blockchain program allowing investors to perform transactions without leaving a trace. The OFAC claimed that the program was used by entities prohibited by the United States, including military organizations. Many investors criticized the motion while also saying that the Ethereum blockchain will likely remain immune due to its decentralized nature.
However, it seems now that they weren’t exactly correct, and at the moment, over 70% of data blocks are considered censored. That’s an almost 30% increase compared to November 2022, when Ethereum was going through one of its lowest periods. Block builders generally have complete authority over the order of transactions and how they are arranged in blocks, meaning they decide on the blockchain content by default. Right now, Titan Builder is the only one claiming not to censor transactions, but if it did, that means Ethereum could reach 90% in censorship.
Relayers
The relayers are third parties who operate software that moves transactions from the builders to the validators. Back in November 2022, the numbers showed that over 75% of them had ceased passing along transactions that official authorities had sanctioned. However, this is also due, at least partially, to the fact that there wasn’t a large number of relayers at the time, and the ones in charge of the larger volumes were removing these transactions from the central system.
According to the latest definitions, only 30% of relayed blocks remain censored as of December 2023. Five builders directly contribute to over 90% of the blocks on the Ethereum blockchain, of which four have chosen to edit transactions. Several operators have chosen to be more cautious, especially if they are US-based. Refusing to comply with the regulations could attract significant trouble for both the individuals and their businesses.
Solana
The phrase “Ethereum killer” has been used for a while now to designate the coins and blockchains that have the potential to remove Ethereum from its throne. While ETH was never able to withstand the sheer force of Bitcoin and surpass it, it is nonetheless the second-largest cryptocurrency in the world. Unlike Bitcoin, Ethereum isn’t known just as a coin but also for the functionalities its blockchain introduced. The system pioneered the discovery and introduction of decentralized finance and apps, as well as non-fungible tokens and the play-to-earn concept.
This has made it very popular among tech lovers who follow the latest developments religiously. So, who are the supposed Ethereum killers that could replace it? The truth is that different investors and analysts will say different things, with each of them betting on a different coin and platform. However, Solana is probably the most widely discussed of all of them, mainly because it is much more visible and stable than the others.
One of its co-founders, Anatoly Yakovenko, recently dismissed these claims, saying that the dynamic between the two coins isn’t what it has been made out to be and that it is essential to continue incorporating efficient technologies. Many in the crypto community believe that a multi-chain future is inevitable. Rather than seeing competition as something negative, the outlook instead is to see it as part of the more extensive evolution parameters of the blockchains.
In fact, some have already begun discussing the existence and emergence of a Solana killer. It’s good for blockchains to collaborate and co-exist, as it shows the system’s potential to continue growing and evolving, as well as expanding to cover different business areas and niches apart from crypto trading.
Price predictions
2024 is just around the corner, and investors are debating which outcome is the most likely when it comes to the coins they’re trading. There are several price prospects for Ethereum, and whether they’ll occur and when is bound to change due to the different influences that affect the crypto environment. The market trends point towards a bullish upswing set to occur sooner rather than later, and many investors have already started buying more to consolidate their portfolios and see more considerable gains when the prices rise.
However, the economic factors and regulatory issues can act as setbacks. The price has been affected by macro factors, especially inflation and interest rates. Even if they didn’t directly cause prices to collapse, they nonetheless caused market stagnation, which affected holdings and caused considerable apprehension among investors. There’s also the possibility that Ethereum could surpass Bitcoin in terms of market capitalization, but that will largely depend on the network updates, as well as whether adoption rates continue to increase or not.
To sum up, many variables could influence how Ethereum will develop in the next year. That makes it impossible to predict the movements accurately. However, this has always been the case for blockchain currencies, and the investors who have been involved in the market for a few years are already familiar with these shifts. Make sure to carefully weigh your options before buying or selling to ensure you see gains and minimize losses.
