Increasingly, there are opinions that the first cryptocurrency is outdated and is in danger of losing its leading position in the market. Is it really?.
The share of Ethereum on the crypto market is about 17%, while Bitcoin is over 43%. However, in April-May of this year, the main cryptocurrency has already shown a downward trend in dominance. While Ethereum was winning back positions.
One of the reasons for the rally of the second most popular cryptocurrency was the issuance by the European Central Bank of digital bonds on the Ethereum blockchain in the amount of $ 100 million. But there are other factors that increase interest in the altcoin, including:
- -General euphoria in the cryptocurrency market;
- -The launch of Ethereum futures trading on the Chicago Mercantile Exchange (CME) in February;
- -High NFT trading volume;
- -A significant increase in DeFi on Ethereum, the total amount of blocked funds in which amounted to about $ 115 billion by May 10, as of June 14, this figure is $ 61 billion.
Steve Ehrlich, founder of cryptocurrency broker Voyager Digital, believes that Ethereum is a better investment than Bitcoin for the next 12 months.
Brian Watkins, an analyst at the Messari consulting company, is confident that Ethereum will reach between $ 5,000 and $ 10,000 by the end of this year.
Billionaire Mark Cuban also praises the prospects of the Ethereum blockchain, as it has a higher transaction speed than Bitcoin, and makes it possible to create decentralized applications thanks to smart contracts. Another positive factor that Cuban highlighted for the altcoin is the release of Ethereum 2.0.
Other advantages of Ethereum over Bitcoin
Vitalik Buterin published the Ethereum white paper in 2013, and the network was launched in 2015. Then the project was called “new generation bitcoin“, thanks to the possibility of creating smart contracts that were not provided for in the blockchain of the first cryptocurrency.
In fact, Ethereum is a distributed, decentralized virtual machine for creating smart contracts. At the moment, it is the most popular blockchain in terms of the number of organizations implementing it.
Ethereum is used by large corporations and government bodies, including the aforementioned European Investment Bank.
Another major technical advantage of Ethereum is the ability to issue NFT tokens. All the most popular NFT platforms use this particular blockchain. By contrast, the Bitcoin network does not provide an opportunity to issue non fungible tokens and create smart contracts. DeFi is impossible without smart contracts.
With the implementation of the Ethereum 2.0 update. altcoin staking will become available, and the yield for node holders can be up to 25% instead of the current 8%.
This year, the Berlin hard fork was activated on the Ethereum network as part of the transition to Ethereum 2.0, and the Altair update will be rolled out in the summer of 2021.
Around the same time, the London hard fork will be implemented on the network, after which the procedure for completely abandoning mining and switching to the Proof of Stake algorithm will begin.
But bitcoin also has its advantages in relation to Ethereum: it is trust in it as the very first and well-known cryptocurrency, as well as limited emission.
The total number of bitcoin is currently about 18.7 million, and their total number is limited to 21 million. At the same time, the Ethereum emission is 116 million and has no restrictions.
