Ethereum has had a largely fantastic year throughout 2017. On January 1st, the Ether cryptocurrency was trading at a respectable $8.24. Then in just five months, Ethereum experienced gains of over 2,000%, even at one point trading at over $400 per token.
Thankfully, the Ether cryptocurrency price has since stabilized at approximately $300, allaying fears of an Ether / Bitcoin bubble which could threaten to undermine the currency. As it happens, however, the blockchain applications which Ethereum touts as making it investable in the first place, might just be about to undermine the altcoin anyway.
Dramatic Ether Cryptocurrency Hacks & ICO Scams
Between January and May 2017, Ethereum cryptocurrency advocates were going full steam promoting two key benefits of Etherum. Namely that:
Ethereum had a more secure and scalable blockchain which many Bitcoin developers were actually leaving the Bitcoin network to help develop
Ethereum wasn’t an Ether /Bitcoin altcoin. Instead, third-party blockchain applications could be built on the network securely and easily and attract investment via Initial Coin Offerings (ICOs)
Fast forwarding to November 2017, however, and Ethereum has gone altogether quiet when it comes to pushing the PR bandwagon. What is more, it’s easy to see why.
At the start of November, a hack and subsequent update of the Ether cryptocurrency blockchain saw 513,774.16 of ETH ($160.8 million) immediately locked and frozen in 587 different ETH wallets. Worse, at the time of writing, those funds are still frozen. An even bigger problem for Ethereum, however, rests with increasing levels of blockchain application ICO fraud.
Understanding Why Ethereum Cryptocurrency ICO’s Simply Aren’t Working
Before going so far as to say that initial coin offerings don’t work, it’s important to understand that in the right context, they do. In fact, the Ethereum Cryptocurrency and blockchain is itself the product of past
Bitcoin investment in the project. What is more, over 10,000 ICO token projects have been launched on Ethereum, some of which have generated over $100 million in market value.
Sadly, increasing numbers of third parties are starting to realize just how lucrative it can be to start raising funds via ICO investment, before grabbing cash and running without ever building or continuing to maintain the blockchain applications which they have promised to.
Ethereum as a way to Circumvent Regular Investment Security Checks
When taking into account recent blockchain hacks and ICO frauds, it’s hard to understand why Etherum hasn’t actually crashed already. If suddenly $160.8 million of peoples personal Bitcoin got lost due to a glitch in the Bitcoin network, you can be assured that the Bitcoin price would start to cave immediately. With Ethereum, however, things get a little trickier.
Because several independently profitable projects have already been built on the Ethereum network, investors associated with such projects are reluctant to start moving money away from the blockchain. After all, as soon as one investor does, everyone will start to.
In the meantime, however, ICO fraud is increasing unchecked on Ethereum, so much so that Jack du Rose, co-founder of Ethereum ICO project Colony, recently told Coindesk that: “Many ICOs seem like a cash grab from people who were unable to raise money from venture capitalists. In many cases, these are poorly thought out tokens predicated on centralized products.”
Ethereum Price Predictions for 2018
While the Ethereum cryptocurrency price is stable at present, it’s safe to say that 2018 won’t see anything like the 2,000% price rallies experienced by Ethereum in 2017. The currency has gone from being ultra secure and the coolest new way for startups to raise capital, to hacked, fraud burden, and embarrassed enough to keep a low profile in the space of just six months.
Of course, no one is saying that the idea behind the Ethereum network isn’t sound. In reality, however, the cryptocurrency is very much an experiment still in motion.