Could Ethereum Price Pass Bitcoin Sooner Than We Think?
Ethereum (ETH) is currently placed as the second coin behind bitcoin. Bitcoin maximalists have almost religiously believed bitcoin to be the greatest digital asset and network ever made. While they may be right, is this to be forever? ETH has rapidly gained popularity and utility behind bitcoin. Especially new investors in the space seem to be betting Ethereum success in large.
The biggest reason they skip Bitcoin for Ethereum, is because they think they missed the train on Bitcoin. And since Ethereum is cheaper, they could potentially make more from it.
Bitcoin price level is still much higher than Ethereum’s. But in terms of gains, Ethereum has passed bitcoin. BTC rose 245% in one year. While Ethereum rose 730% in the same time period. Almost 3x the gains of Bitcoin. Which has driven investors wanting to put more money in Ethereum. Expecting that they will get more returns on the coin.
On market capitalization, Bitcoin is still number one. It is currently a little over 652 billion market cap, while Ethereum is quite a lot behind with 247 billion.
But when you take out money and power dynamics, Bitcoin falls short.
Ethereum Blockchain vs. Bitcoin Blockchain
The two blockchains have major differences. The Bitcoin blockchain is basically a database of accounts – a ledger. Ethereum blockchain is much more sophisticated.
Things that are possible with Ethereum just simply can’t be done with Bitcoin.
For example, the Ethereum blockchain can store computer code.
Smart contracts are an example of this. A smart contract is an agreement written in code. Once the conditions set by both parties are met, the smart contract is executed. This leads to smoother and faster transactions.
Decentralized Finance, or DeFi is another important application that is possible on the Ethereum blockchain. DeFi allows other applications and currencies to be built on the Ethereum network. This means that the network is programmable to do other things than its primary use cases.
ETH 2.0 Could Destabilize Bitcoin
With ETH 2.0 coming, a lot of things are going to change. The move from proof of work (PoW) to proof of stake (PoS) means Ethereum will use significantly less energy. It is estimated that Ethereum mining will use 99% less energy for mining than Bitcoin. A topic that has been widely on the news lately.
So, eyes have been turned to Bitcoin mining, amid the talks about its environmental impact. Which is purported to be one of the highest energy-consuming activities in the world. Using fossil fuel-based energy contributes the highest amount of greenhouse gases.
ETH 2.0 would also mean faster transactions. The new network would significantly reduce network congestion. Reduced network congestion means reduced fees.
High fees have always been a huge problem in the bitcoin blockchain, especially when the number of simultaneous transactions is high. This was meant to be resolved with the lightning network. But even that has had high fees related to high network congestion.
