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 Text | Internal Reference Jun The house leaked, but it rained all night, and the boat was late and encountered a strong wind. ETH, which has been optimistic about the industry in the past two days, suddenly plummeted without warning, leaving many people confused and losing confidence in digital currencies.  Coinmarketcap data shows that Ethereum reached its highest point of about US$1,343 in early January 2018, and is currently at US$288. It fell to US$264 a few days ago. It has fallen by 80% this year.  Many people in the industry can’t understand this ETH plunge. As a result, various analyzes of the reasons for the decline came one after another. Mr. Nei Shen briefly sorted it out. There are multiple reasons, which one is more reliable? The first guess is a malicious attack from a competitor. The cause is from August 9th. A series of strange transactions have appeared on the Ethereum network. Because these transactions are all related to the same address. After receiving the first transaction of 0.02 ETH, this address generated 600 transactions within 15 minutes. What’s even more frightening is that this phenomenon continued, and within 30 hours, this address accumulated 48,000 transactions. Some people believe that this is a premeditated spam transaction attack on Ethereum. Some people even speculated that Ethereum’s competitor EOS organized the attack. But this is just groundless speculation, and no one can provide sufficient evidence. Moreover, the cost behind this "spam" attack is very high, because the handling fee for each transaction exceeds the amount of the transfer. According to statistics, the total handling fees for these transactions have exceeded 160 eth (approximately $58,000). The most important thing is that the transaction volume of this attack on ETH is not large. At most, it will have a certain impact on the transaction speed of Ethereum. Not enough to cause the price of ETH to plummet. The second theory is the liquidation and selling of ICO projects. Some people say that it was the project parties and some investment institutions that caused the stampede. In the early stage, some projects have completed private placements and have a large amount of ETH in hand. In addition, recent ICO projects have frequently failed, causing many investment institutions to no longer easily invest in ICO projects. And they have a lot of ETH in their hands. When the general trend is not good, the pressure from these two parties to focus on cashing out has led to this round of sudden plunge.   Is this really the case? Even if the project party and an investment institution have a need to cash out, in fact, the ETH expenditure in the past month was 100,000+, which was significantly lower than the average monthly 1.4M since the beginning of the year. ； Suffice it to say, the average monthly rate has dropped to its lowest level in nearly a year. As said, this statement is simply untenable. The collapse of ETH is not due to the selling of the ICO project side. The third theory is that shareholders liquidate and sell. Zheng Di, co-founder of Singularity Finance, said recently that he has recently observed more than 210,000 ETH being transferred out of a suspected Ethereum "creation address", many of which were deposited into Bitfinex and Kraken exchanges for suspected cash out. The genesis address is the address of Ethereum when it was crowdfunded in the ICO. It includes the earliest Ethereum crowdfunding participants and the two "main players" of the Ethereum Foundation. It initially owned a total of 72 million ETH, accounting for 71% of the total amount of Ethereum.  While there may have been sell-offs in the past, the recent cold spell in the cryptocurrency world comes amid a recent downturn. This kind of sign is similar to "the major shareholders of listed companies secretly reduce their holdings", coupled with the fact that the major shareholders may hold more than 70% of the shares, it may become a "big stone" suppressing the price prospects of ETH. The proportion of crowdfunding and foundations is too high, and now it becomes the potential new supply of ETH. When the project team sees this situation, it may be frightened and sell immediately. a terrible truth As for the third situation, Nei Shenjun thinks it is a high probability event. And this also reveals a problem that everyone has deceived: that is, currency holders choose the opportunity to cash out. This also means that every digital currency investor has a "thunder" on his head that can explode anytime and anywhere. As we all know, any project party that issues TOKEN only takes a small part of it for private placement, and the vast majority of the coins are in the hands of the project party itself. Although this part of the currency has a certain closed period, if it is released after the closed period, it is completely under the control of the project party when it will be shipped. The reason why Bitcoin has gained people's support and recognition is that it is a completely decentralized product, with high chips dispersion and not easy to be manipulated. Let’s first take a look at the chip distribution of Bitcoin, as you can see from the picture below: According to data from BiNiuNiu, the number of Bitcoin holding addresses reaches 22,933,719. It can be said that the chips are highly dispersed. The top 10 currency holders: 6.01%, the top 20 currency holders: 9.09%, the top 50 currency holders: 14.51%, the top 100 currency holders: 19.01%. The top few largest currency holders are all digital currency trading platforms, which also proves the strength of the platform from another aspect. When the platform encounters security problems, it has the ability to compensate customers for their losses.  Next, we are looking at the chip distribution of Ethereum. Although Ethereum has always been favored by many people and is also the most recognized digital currency besides Bitcoin, judging from the distribution of ETH chips, it is relatively concentrated. According to data from BiNiuNiu, the number of Ethereum currency holding addresses reaches 41,053,961. The top 10 currency holders: 11.48%, the top 20 currency holders: 17.63%, the top 50 currency holders: 28.11%, the top 100 currency holders: 35.07%. We also found that the top few large investors are project parties and investors. It is not difficult to understand why Ethereum has plummeted.  But except for Bitcoin and Ethereum, the distribution of chips is pretty good. This is not the case with other digital currencies. To this end, Nei Shenjun has made a table of the chip distribution of some popular digital currencies so that everyone can see it clearly at a glance.  The main purpose of blockchain is to achieve decentralization. If the number of currency-holding addresses is greater and the chips are more dispersed, it proves that the ecological construction progresses more smoothly and the public's recognition of the project is higher. As can be seen from the table above, some of our familiar digital currencies do not perform very well in terms of the number of currency holding addresses or the concentration of chips. This also reflects that the development of blockchain is in its early stages. But it cannot be denied that such a high concentration of chips is undoubtedly a "thunder" on the head for investment, which can explode at any time. Therefore, Mr. Nei Shen would like to remind you to invest carefully in projects with excessive concentration of chips. On the other hand, the sharp drop in the price of ETH is also a good thing from another perspective. As the most complete public chain, Ethereum is supported by the VB team and is a typical value currency. From a short-term perspective, this price collapse will have a greater impact on start-ups that are conducting ICOs or preparing to conduct ICOs. But from a long-term perspective, it is a process of survival of the fittest in ICO. To a certain extent, this is also a necessary process for the healthy development of the industry. ArcBlock founder Mao Zhihong has more reference value for ETH value judgment, "The current decline is only temporary. On the contrary, because the price of eth has dropped and gas has become cheaper, Ethereum is actually more practical. If they improve the system and improve performance, it can become more valuable. On the contrary, it will become more valuable as the bubbles of competitors such as EOS burst. ”At the same time, he also boldly predicted that ETH’s recovery will not take too long. Text | Internal Reference Jun Special statement: ICO projects in the blockchain industry are mixed, and investment risks are extremely high； It is difficult to distinguish the authenticity of various digital currencies, so users need to invest with caution. "Chain Internal Reference" is only responsible for sharing information and does not constitute any investment advice. All investment behaviors of users have nothing to do with this site.   (The pictures in this article come from the Internet. If there is any infringement, please contact us and delete them. ) Please indicate the source when reprinting. ———— END ———— REVIEW ◆◆Review of past issues         |
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