By Alejandro A. Tagliavini*
Some time ago, when for the first time I found out that, for example, in Decentraland some «land» was listed for millions of dollars, I thought, like many, that this was the biggest bubble in history, ridiculously big: who pays millions for a plot that is nothing more than a drawing on a PC? You must be very crazy… But that’s not all, there are those who buy those properties (in NFT format, non-fungible tokens), «build» on them and then they rent them out for a monthly fee! Crazy.
But then they explained it to me. These «fields» are, for example, located in virtual «cities» that receive thousands, if not millions, of daily visits from cyber surfers who, eventually, can «enter» the properties and buy electronic items, clothing, or participate in concerts. paying for a ticket or a party that is accessed with an avatar and paying with a DJ who charges for his work.
For example, recently was held the Metaverse Fashion Week (MVFW) which included more than 60 exhibitors such as Selfridges, Tommy Hilfiger, Dolce & Gabbana, Vogue, Forever 21, Kirkwood, Estee Lauder and Perry Ellis. By the way, there was no lack of the «after party» with the presence of personalities and, during the closing party, the show of the Canadian Grimes.
All this is possible through Ethereum’s blockchain technology -which allows Smart Contracts-, with which you can create unique avatars, make purchases and payments between platform users, based on to NFTs. And this entails the true democracy of cryptocurrencies, where governments, as we know them today, are nothing but violent impositions of primate animals.
It is that in this world of blockchain, as is the case of Bitcoin (BTC), no one really governs -in the sense that no one imposes their criteria or will on another no matter how «fair» it may be- but everyone is free to take the decisions they want with the only requirement of being -although completely anonymous, according to each one’s wishes- transparent and true and validated, in all cases, by the simple majority of hundreds of thousands of computers spread throughout the world.
By the way, although the virtual world – always based on the real world – is unstoppable and will encompass all areas of life, like all incipient, novel and vertiginous developments, it is still very unstable and must be handled with some care because there are opportunists and mistakes, sometimes serious, of beginners.
Both BTC and ether are “mined” – produced – using a “proof of work” (POW) method, in which thousands of miners, or network nodes, compete to solve very complex mathematical puzzles. It is a process that requires a large amount of computation, energy, and the alternative method of «proof of stake» (POS) uses much less.
Ethereum has long suffered from speed and processing cost issues as it only processes 30 transactions per second as a POW blockchain but expects to process up to 100,000 transactions by moving to POS – ether 2.0 – which will allow it to compete with smaller alternative cryptocurrencies, such as Solana and Cardano, which use POS partially or fully, for decentralized financial applications such as trading, investing, lending, and even NFTs.
That as long as Ethereum actually performs its update. As Medha Singh and Lisa Pauline Mattackal recount, «ether» has promised to go to the next level, outperforming its crypto rivals and even eclipsing the godfather, BTC. But the No. 2 cryptocurrency was supposed to be weeks away, due in June, from the «merge,» a transformative upgrade of its Ethereum «blockchain» to make it faster, cheaper, and less power-hungry, which opens the prospect of a more agile and clean crypto future.
But that merger has been delayed, worrying some investors. «The Ethereum maxis, the people who believe in ‘flippening,’ think it’s coming very soon,» said Noelle Acheson, head of market insights at Genesis Trading, «but it’s just a theory and remains to be seen.» Ether fell 8% from $3,215 to $2,947 on April 11 as Ethereum lead developer Tim Beiko said on Twitter that the June release was behind schedule as testing continues, “we are definitely in the final chapter” This month it has dropped 13%, to USD 2,844.
Now, the market capitalization of ether, of USD 358,000 M, is less than half that of bitcoin, and both represent 60% of the cryptocurrency market. However, BTC is still just an investment with no real ability to be used for smart contracts in decentralized finance applications. For this reason, many investors believe that a major market turnaround is inevitable and that the merger – Ether 2.0 – will act as a catalyst for Ethereum to become the dominant platform. «We’re seeing them rotate to Ethereum in preparation for the merger, although we don’t know when that’s going to be,» said Acheson.
Meanwhile, the White House – and all politicians – try to regulate if not ban the crypto world, openly acknowledging that it threatens the life of its «government» by shifting power to the people in cyberspace. The White House spokeswoman, Jen Psaki, calls again for the US Congress to approve new regulations that force social networks like Twitter to account for «the damage they cause.» She spoke this way shortly after it was announced that Elon Musk’s purchase offer for about USD 44,000 M was accepted.
* Senior Advisor at The Cedar Portfolio and Member of the Advisory Council of the Center on Global Prosperity, de Oakland, California