JP Morgan, the largest US bank and one of the largest banks in the world, believes that updating Ethereum could start a multi-billion dollar industry. JP Morgan estimates that the Ethereum stock industry, currently valued at $ 9 billion, could reach $ 40 billion by 2025 (1404).
to the the report GP Morgan reports that launching Ethereum 2.0 will lead to more Ethereum acceptance and could increase shareholder payments to $ 20 billion in the early years of launch. According to JP Morgan, this number could reach $ 40 billion by 2025.
The two GP Morgan analysts who co-authored the report say that the return on equity is an attractive investment when interest rates are zero. This refers to the low interest rates that banks pay for customer savings accounts.
Ethereum 2.0 is an upgraded version of Ethereum Network that helps improve network security and scalability. Ethereum 2.0 improves network productivity on a large scale by introducing processes such as sharding and integration. Sharding is simply the process of splitting a database into smaller pieces so that the network can withstand more load.
The Ethereum 2.0 update shifts the network mechanism from proof of work to proof of stock. This change can drastically reduce the energy required to extract digital currencies as well as verify network transactions.
Because the proof-of-work process for verifying network transactions requires devices to solve complex mathematical equations, its energy consumption is very high. Bitcoin and Ethereum continue to use the proof-of-work mechanism, which has raised concerns about energy consumption in the digital currency mining industry. Digital currency mining is said to be in the third category of activities that consume a lot of energy.
Also read: Proof of work and proof of stocks, concepts and differences
On the other hand, stock proofing does the process of verifying transactions in the Blockchain with the same results as the proofreading process, except that it does not need to solve complex mathematical equations. Proof of stock allows holders of a currency to validate a transaction. This mechanism uses a fictitious random process to select a node that takes over the validation of the next block.
According to the Ethereum website, this change will take place in three stages. The first step is the Beacon Chain. Bacon China is currently active and started with a shareholding. Bacon China also paves the way for future updates and system-wide coordination.
The next step is Merge. At this point, Ethereum’s core network will be merged with Bacon China. This is estimated to happen in 2021.
In the last step, the folds are added. Folders increase Ethereum’s capacity to process transactions and store data. Shard China is to be added to the Ethereum network in 2022.
The JP Morgan report comprehensively examines why equity may be the ideal way to invest. Sharing offers up to 13% profit on the digital currency balance sheet, which in some cases is even higher. Compared to traditional banks or investments such as buying bonds, investing is a much more attractive investment opportunity for investors.
The GPS report states:
Dividend income reduces the cost of replacing digital currency ownership with other asset classes such as the US dollar, treasury bills, or money market funds in which investments have positive nominal returns.
The report also explores the fact that equity rewards can be a way to reduce the negative effects of inflation. In addition, the report states that using equity as a way to earn passive income is on the rise.
At present, the market value of stock tokens has reached more than $ 150 billion, and this number will only continue to grow until equity becomes more and more mainstream of the market.
Although JP Morgan CEO Jamie Dimon is not interested in digital currencies, the company is looking to offer digital currency investing options to its customers. JP Morgan is reportedly preparing to offer its Bitcoin Mutual Fund to its customers.