Since its inception in 2009, Bitcoin has become the “face of cryptocurrency”, anytime the term “cryptocurrency” is used, Bitcoin is the first thing that springs to mind. Bitcoin never had a major competitor to compete with for many years. In 2013, Bitcoin accounted for over 90% of the cryptocurrency market value.
However, in 2015, Vitalik Buterin, a 20-year-old Russian-Canadian, built a platform known as a “dapp” that permits app development on the blockchain. This platform is now known as Ethereum (ETH). Ethereum gained prominence as a serious rival, capturing a significant portion of the bitcoin market share in just five months.
Ethereum was not designed to compete with Bitcoin. Rather, it was intended to be a De-Fi platform. Almost by chance, the popularity of its platform propelled Ethereum’s token (Ether) to become the world’s second-largest cryptocurrency.
The recent drop in the price of Bitcoin has shifted attention to the second-largest cryptocurrency, Ethereum, which some belief has the potential to overtake Bitcoin as the leading digital currency in terms of market share.
Bitcoin’s price has risen and fallen dramatically in recent months primarily because of China’s tightening of cryptocurrency legislation and Tesla CEO Elon Musk’s shift in position on Bitcoin.
The May slump aided Ethereum in closing this $350 billion deficit. While Ether fell by about 11 percent in May, Bitcoin fell by 37 percent. Ethereum appears to be outpacing Bitcoin in terms of year-on-year growth. While Ethereum has increased by over 900 percent in the last year, Bitcoin has increased by only 275 percent.
Is Ethereum better than Bitcoin?
When it comes to speed, Bitcoin lags considerably behind Ethereum. ETH block times are presently under 14 seconds, compared to 10 minutes for Bitcoin. A bitcoin transaction takes approximately 40 minutes to complete, whereas an Ether transaction takes approximately 5 minutes to complete.
Mark Cuban, an American billionaire, in an interview stated that
Most people look at speed and cost compared to BTC or ETH , while those things can be important, I look at blockchains as networks with development platforms via smart contracts.” “I own a lot of Ethereum because I think it’s the closest to a true currency”
The Ethereum blockchain is capable of executing smart contracts, which power decentralized applications such as DeFi and NFTs. The ethereum blockchain is known for its cryptocurrency ether, but it may also serve as a foundation for other digital coins.
Raoul Pal, a former Goldman Sachs executive and the co-founder of Real Vision, recently explained in a youtube video that why he has become significantly more bullish on Ethereum.
He became very interested in Ethereum after realizing that those who claimed Metcalfe’s Law only applied to Bitcoin were incorrect.
So I started then trying to understand more about Metcalfe’s Law, how it affected the mobile phone industry, the internet, and then stuff like Amazon, Facebook, Google, and all of that. So figuring out all of that was a tremendous milestone for me and that ETH was gaining faster adoption than Bitcoin.
At this point in the risk cycle and with ETH 2.0 coming (cheaper fees and less supply), I’m struggling to not sell all my BTC to move my entire core position to ETH. To be clear – I’m a massive BTC bull, but I think ETH is the better asset allocation for performance right now.
The ETH space is growing at a rate of 100 percent year on year (vs. 50 percent year on year for BTC), and it is attracting a sizable amount of developer talent and applications.
Ethereum is also working on a key change that will allow it to conserve up to 99.5 percent of the energy it now requires. Given the fierce opposition to cryptos such as Bitcoin on climate change grounds. According to Carl Beekhuizen, an Ethereum Foundation researcher, Ethereum will shortly complete the shift from the Proof-of-Work (PoW) system to the Proof-of-Stake (PoS) system.
Because of the technological innovation, Ethereum will utilize even less energy than Bitcoin and It’s conceivable that more investors may be drawn to Ethereum in the future.
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Disclaimer: Trading/Investment in cryptocurrencies are subject to market, technical and legal risks. The views and opinions expressed in the article are solely those of the author and do not reflect the views of Todayq.