The Ethereum network since its launch has captured the attention of investors and developers equally due to its secure and superior functionality and perceived growth potential.
The original coin of the Ethereum blockchain, ETH is the second largest coin by market capitalization, coming right after Bitcoin.
Ethereum is valued at $1,990 at the time of writing, less than half its all-time high of $4,356 recorded in May.
Analysts believe that the current price of Ethereum does not do her justice.
By comparing the total market value of Ethereum with PayPal, we find that the market value of PayPal, estimated at $340 billion, outperforms the market value of Ethereum, which is estimated at $231 billion.
But when comparing in terms of functions and uses, we find that Ethereum is oppressed and undervalued than it deserves.
The following are the factors and reasons that show that Ethereum is undervalued, based on its comparison with PayPal:
1. Settlement of Transactions:
When considering the volume and value of transactions, we find:
In the first quarter of 2021 alone, Ethereum settled transactions worth $1.5 trillion, while PayPal transactions for the whole of 2020 totaled $936 billion.
At this rate, we find that Ethereum settles almost as many transactions in a month as PayPal does in an entire year.
The chart below showed the quarterly growth of the daily trading volume on Ethereum, confirming the huge potential for growth in the future.
Even other crypto projects lag far behind when compared to the daily settlement volume on Ethereum.
According to Money Movers, Bitcoin settlements are stabilizing at around $9.93 billion per day, while Ethereum is 3 times that number.
When it comes to the total number of users on each platform, PayPal is a clear winner.
In the first quarter of 2021, PayPal had 392 million active user accounts.
While the total number of unique addresses on Ethereum was 160 million, and most users had multiple accounts, the actual number of human Ethereum users could be a third of that number.
However, the daily increase in the number of addresses was 225,969.
It should also be noted that PayPal has amassed these users since its inception in 1998, compared to just the 6-year-old Ethereum network.
The chart below shows the growth in the number of users that Ethereum has experienced.
3. Transfer Fee:
In terms of transaction fees, PayPal has a number of different fees for different users which can range from 2.9% to over 4% of the transaction value.
The fee for Ethereum gas at the time of writing this article is 18.76 Gwei.
While these fees rise with the demand on the network.
However, it is expected that fees will be improved further with the move to PoS, which will make Ethereum fees lower than currently.
The adoption of Ethereum by large financial institutions is just an additional indicator of Ethereum’s future potential.
For example, the European Investment Bank issued $121 million worth of digital banknotes using Ethereum in April.
Many banks around the world are exploiting it, whether in issuing bonds or settlements…
These are all factors that prove the potential of Ethereum and what it could be in the future.