While NFTs evolved as a phenomenon in the blockchain world, there was huge network congestion in the Ethereum network due to the enormous adoption of NFTs in the business world. Ethereum evolved as the pioneer in the blockchain world by enabling applications to evolve with blockchain technology rather than the blockchain just being referred to as the technology owned and controlled by bitcoin. Ethereum supported businesses to adopt blockchain and amplified the way data transactions take place, restructured and given the space for new innovations. Such revolutionary change and transition are made possible by Ethereum, a genesis blockchain network to unleash the abilities of blockchain through its unique standards and applications. This made Ethereum evolve as the pioneer in blockchain technology and its applications.
The unique standards and smart contracts proposed by Ethereum introduced “ Tokens,” and the rest is History!
The business evolution in blockchain begins here. The tokens with ERC 20 standards boosted the adoption of blockchain business with the ability to raise funds and give life to innovations in futuristic technology. This supports burgeoning entrepreneurs to take a leap towards the future with this revolutionary technology that possesses the ability to create a revolution in every industry with its eminent possibilities. Ethereum has been a model for the inception of new blockchain networks in the market which adopt the token standard of Ethereum and is EVM compatible. EVM (Ethereum Virtual Machine) is the environment in which all Ethereum accounts and smart contracts live. At any given block in the chain, Ethereum has one and only one ‘canonical’ state, and the EVM is what defines the rules for computing a new valid state from block to block.
At the beginning of the blockchain era, every application in the blockchain was developed in the Ethereum network, and every new blockchain network that protruded out was EVM compatible.
The Congestion:
The business adoption of blockchain, for its unique characteristics and the ability to generate huge revenue in a short span, made Ethereum experience congestion in making data transactions. At the early stage, Ethereum is only capable of processing 12-15 transactions per second, which are too low to handle such a huge audience in the network, and the energy consumed to process each transaction and run the network is huge, which is like consuming the power needed to keep the lights on in the Finland which is due to its network’s Proof-of-work mechanism (PoW). Another revolutionary standard of ERC 721 introduced the term “NFT” (Non-Fungible Token), which made a paradigm shift in the blockchain business.
Enterprises evolved in the blockchain by offering services in DeFi (Decentralised Finance), and adopted the NFTs widely. Also, many small-scale businesses and burgeoning entrepreneurs felt kick-starting with NFTs would be a better option to establish a business in blockchain that makes huge revenue in a short period of time. Also, these NFTs opened the monetization opportunity for creators like artists and musicians and earned them through their creations.
NFTs’ ability to convert any creations into the most valuable crypto asset with proven ownership and authenticity. This NFT adoption in business made a 50% contribution in the growth rate and adoption of blockchain all over the world. A market report published by Verified Market Research (VMR) provides a prediction for the future of the nonfungible token (NFT) market, projecting its value to swell to $231 billion by 2030. At the early stage of NFTs, 80% of NFT projects were developed under the Ethereum network which caused the network to experience unexpected congestion and resulted in a humongous rise in its gas fee.
The Transition:
NFT’s unique characteristics and its ability to create huge returns with demand and scarcity in the market made the Ethereum network flood with NFT projects. The introduction of the nascent concept “The Metaverse” and its economy as NFTs created new possibilities for business ventures in the blockchain network. The transaction fee in the Ethereum network costs way more than the worth and return the NFT can provide. This affected numerous NFT projects developed under the Ethereum network and resulted in inefficiency. While NFT is the most profitable revenue-generating business in the current trend, many other blockchain networks like Binance and Solana took advantage of this situation and amplified their network’s scalability to make transactions efficiently. In the current situation, Solana experiences huge traction of NFT projects due to its scalability and its own standards of NFT, but it does not reach the value attained by the NFTs developed in the Ethereum NFT network.
The Merge:
To overcome the inefficiency and congestion in the network, Ethereum innovated a solution by replacing the Proof-of-Work (Pos) with Proof-of-Stake(Pos) mechanism without affecting the existing network, applications, and its assets in the market. This is literally a process of changing an engine from a running car to another without affecting both. With over the years of research and development of Ethereum 2.0, the network has made September 15 a monumental day in blockchain history by successfully merging it with the current Ethereum network, which runs on Proof-of-Work mechanism. Following this, Ethereum’s energy consumption will drop by 99.9 percent, which gives a remarkable impact in the efficiency of the network.
The update’s complexity is mentioned as one of the largest open-source software endeavors in history, which required unimaginable coordination across dozens of teams and enormous time and energy of individual researchers, developers, and volunteers.
Ethereum developers say the upgrade will make the network which comprises a $60 billion ecosystem of crypto exchanges, lending companies, non-fungible token (NFT) marketplaces, and other apps, more secure and scalable. Also, Ethereum‘s developer Tim Beiko says Ethereum 2.0 works by staking the revenue instead using the manpower to run the network, which is efficient enough to create a sustainable future.
Incentives for your crypto business:
The applications developed under the Ethereum network are expected to perform efficiently with better outcomes without impacting the environment. Ethereum’s merge is a first step to improving the efficiency and scalability of the network. This monumental change opens exceptional opportunities for the applications in Ethereum and makes business to reap the outcomes of the efficiency created by the merge. Now, the pioneering network in the blockchain is slowly gaining the ability to improve its efficiency and scalability and support businesses to perform transactions effectively in the most secured blockchain network.
It’s the right time and right choice to transform your business and reap the benefits of the Ethereum network. As a pioneering blockchain business development company, Infinite Block Tech offers extensive opportunities to develop your crypto business with numerous applications in Ethereum Network.