One of the indicators our research team has been following in parallel with Ethereum price is Ethereum transactions. We actually wrote earlier this year about Ethereum price being supported by higher and higher Ethereum transactions.
There are not many data points to measure Ethereum’s performance, adoption because Cryptocurrencies are not as accessible as say Fiat currencies or just conventional investments. This is about to change especially with the launch of Bitcoin options, futures and eventually the possible ETF. But current state, there are not many data points, and the Ethereum transaction count is one of the very few. Good thing it is also an important one in our opinion.
Since the recent Byzantium fork, Ethereum is scaling better and the transactions are much faster and cheaper compared to right before the hardfork.
And while more transactions mean larger adoption, the networks needs to be able to handle the transactions effectively. This is what the Ethereum Alliance development team is currently working on and will be deployed later on in 2018. By moving Ethereum from a Proof of work (POW) to a proof of stake environment, we expect transactions to increase even more and the scalability as well.
For now, it seems that there is demand for Ethereum and the transactions are relatively increasing in cost and time. The most recent stress on the Ethereum Network is from a rather funny source: The CryptoKitties Game Craze.
Cryptokitties are to be taken seriously here because they are creating an excitment around Ethereum since that is the only Cryptocurrency used to buy features in the game. This event is also important because of the new people it will expose not only to knowing and learning about Ethereum but ultimately to using Ethereum. Social media also LOVES this type of hype so we can see whyy this is going viral.
All in all, Investors need to keep an eye on the increasing number of transactions because they reflect demand for Ether. They also need to keep an eye on scalability for now but this is a good problem to have because it means adoption and should be resolved in the short term with the next phase of Ethereum upgrade.
You can read more about the Ethereum upgrade in the articles below: