Bitcoin and Ethereum are the two cryptocurrencies that have been at the forefront dominating a significant portion of the crypto market. All thanks to their global adoption. Even though these two cryptos have been in the market for almost a decade, they are still holding onto their top positions with no sign of losing them. With the recent Ethereum Merge, the network now moves to less expensive and much more energy-efficient proof-of-stake consensus than the earlier proof-of-work. It is the most significant event in the whole cryptoverse ever.
The potential chance of Ethereum overtaking Bitcoin is called the flippening. It can occur due to various factors:
Even though Bitcoin and Ethereum are digital currencies, the primary purposes of each are quite different. The purpose of Bitcoin is to establish itself as an alternative to fiat money, and hence a medium of exchange and store of value.
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The purpose of Ethereum is to facilitate and monetize the operation of the smart contract, dApps, DeFi, and any other blockchain solution. For instance, if Bitcoin serves as a digital equivalent of gold, Ether is used to power the Ethereum network and its applications. The smart contracts on Ethereum can also open new doors in other prominent sectors of the crypto ecosystem such as DeFi, NFTs, and Metaverse.
Type of consensus mechanism
Bitcoin uses a proof-of-work consensus mechanism widely criticized for its high energy consumption. Ethereum has recently upgraded to the proof-of-stake mechanism, which has decreased nearly 99.9 percent of its energy consumption.
With the rising concern of the impact of blockchain on the environment, this could be a significant factor in choosing ETH over BTC.
Number of transactions
While Bitcoin is a possible payment method, it can only handle around seven transactions per second. Bitcoin is now too reluctant to function as a suitable means of exchange. On the other hand, Ethereum allows building and developing valuable products.
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Ethereum blockchain will require some amount of Ether or ETH, which automatically raises the demand and ultimately the price of the crypto.
Bitcoin takes nearly 10 minutes to add a block to the network, while Ethereum takes only 15 seconds. Ethereum can also be staked to generate returns, which might excite more people to buy and use ETH.
Ethereum overtaking Bitcoin’s market capitalization is a much-talked-about event in the crypto sphere. However, both of these cryptos serve different purposes. While Bitcoin is a store of value and a turbo-charged medium of exchange, Ethereum tends to democratize data and build a decentralized economy. Hence, Ethereum has a long development roadmap that instils confidence in people’s minds in crypto. With an increasing demand for Ethereum and its use cases day by day, it stands a real chance at being a much more valuable token. But for the flippening to take place, it may take some more time for Ethereum to overpower Bitcoin.
(The author is the CEO and co-founder of Mudrex, a global crypto investing company.)
Disclaimer: The opinions, beliefs, and views expressed by the various authors and forum participants on this website are personal. Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Cryptocurrency is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Cryptocurrency market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.)