No.1 Cryptocurrency: Can Ethereum beat Bitcoin in future?

No.1 Cryptocurrency: Can Ethereum beat Bitcoin in future?

The recent decline in Bitcoin price has put the spotlight back on the second biggest cryptocurrency, Ethereum, which, some say, has the potential to replace it as the number one digital currency in market share. Bitcoin has seen a major fluctuation in price in the past couple of months. It rose to the all-time high of $65,000, only to fall 50 per cent to $30,000. Its market share also went down to 42 per cent ($1.6 trillion) from 70 per cent before the start of 2020, CoinGecko data shows.

The month of May saw the biggest fall in Bitcoin price, thanks to the tightening of cryptocurrency laws by China and Tesla chief executive Elon Musk changing his stance on Bitcoin.

When compared to the market share, Bitcoin is still way ahead compared to Ethereum. The May rout helped Ethereum narrow this gap by about $350 billion. While Ether dropped by around 11 per cent in May, Bitcoin suffered a much worse route at 37 per cent. On year-on-year growth too, Ethereum seems to be beating Bitcoin. While Ethereum grew over 900 per cent over the past year, Bitcoin saw a 275 per cent jump.

Ethereum investors and its fans say there are two big reasons for a strong momentum – popularity for blockchain-based financial services and digital collectables and a major upgrade in its technology, which is underway and will bring a tectonic shift in the way Ethereum works.

Also read: Big change coming in Ethereum! To give huge advantage against Bitcoin

As countries become more open towards cryptos, interest in digital currencies have expanded beyond Bitcoin. Experts say Bitcoin will eventually lose its title as the number one crypto as another digital currency with better technology and tech agility will become more popular among crypto investors, and Ethereum seems to be offering just that.

“(Ethereum) will likely exceed Bitcoin at some point in the future, as Ethereum will be superior when it comes to innovation and developer interest,” said Tegan Kline, co-founder of blockchain software company Edge & Node, reported Bloomberg. Some also believe that replacing Bitcoin won’t be an easy game for Ethereum as it still has many advantages over Ethereum. “Bitcoin will still remain king of the cryptos,” Edward Moya, senior market analyst at Oanda Corp told the news platform.

Also read: Bitcoin price recovers to $38,403 after Elon Musk’s meeting with miners

Ethereum is also working on a major shift that will help save up to 99.5 per cent of the energy it currently consumes. Given the stiff opposition cryptos like Bitcoin are facing over climate change issues, it’s possible that more investors get drawn towards Ethereum in future.

Ethereum already uses lower energy than the most popular cryptocurrency Bitcoin. It will soon be completing the transition to Proof-of-Stake (PoS) from the Proof-of-Work (PoW) system, according to Carl Beekhuizen, an Ethereum Foundation researcher. The technological shift will mean Ethereum will consume even less energy than Bitcoin.

Meanwhile, in the past 24 hours, Bitcoin has seen 0.18 per cent growth in its price to $36,291.92, while Ether grew 3.79 per cent to $2,589.5.

Also read: Cryptocurrency market crashes! Is it time to sell Bitcoin?

Ethereum, dogecoin surge as cryptos continue volatile recovery

Ethereum — the world’s second most popular crypto — soared more than 10% on Tuesday morning. Photo: Reuters

Cryptocurrencies were broadly higher on Tuesday morning as they continue a volatile recovery after a major sell-off the weekend before last.

Bitcoin (BTC-USD) was up 3.6%, trading at $36,878 (£25,915). It once again fell below $40,000, although last week it did manage to crawl past the mark. It remains far from its all-time high of $63,000.

Ethereum (ETH-USD) — the world’s second most popular crypto — soared more than 10%, to trade at $2,655, while dogecoin (DOGE-USD) gained 8.6% to $0.33.

“It seems like everything is very much hanging in a holding pattern,” said Naeem Aslam, chief market analyst at Ava Trade.

But he said “the upward momentum still looks like it lacks any major backing, and a threat for a further downward shift in the bitcoin price is still certainly on the table.”

“Basically, as long as the bitcoin price doesn’t cross above the 40K and break another resistance which is at 50K, it is unlikely we may see a beginning of another major bull rally” he added.

Kaia Parv, head of Investment Research at trading platform Fxprimus, told Yahoo Finance UK that “bitcoin and correlated crypto assets may have found their bottom as there seems to be bullish price action this morning. Having said that, technical indicators are still deeply bearish for the upcoming trading sessions.”

Over the weekend crypto portfolio management app Blockfolio asked Tesla CEO Elon Musk to create a hot tub heated by dogecoin, to which the crypto supporter replied: “great idea.”

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Musk has been a dogecoin supporter for a while now, tweeting about it regularly. Almost every time this sends the price of the joke token higher and this time was no different.

Meanwhile, bitcoin has been dampened by many things recently, including a crackdown in China and Iran. Last week, Bank of Japan governor criticised digital currencies for speculation.

Watch: What are the risks of investing in cryptocurrency?

“Most of the trading is speculative and volatility is extraordinarily high,” Haruhiko Kuroda had said.

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And the country’s regulator has also issued a warning to crypto derivatives exchange Bybit for allowing residents of Japan access to the exchange without registering with the country’s regulator.

“Cryptocurrencies were the biggest losers in May… seeing a massive slump as authorities struck a distinctly negative tone towards them in multiple countries,” noted a Deutsche Bank (DBK.DE) note.

Read more: European markets open higher amid third wave fears

But cryptos are continuing to get mainstream acceptance.

Financial advisory organisation deVere Group said it will offer its clients a fixed-yield bond that tracks futures of bitcoin and ethereum on the Chicago Mercantile Exchange over a one-year maturity period.

The decision “was made to cater to the soaring client demand regarding cryptocurrencies,” the company said.

WisdomTree, an exchange traded fund and exchange traded product (ETP) sponsor, announced its physically-backed bitcoin and ether ETPs have listed on Euronext (ENX.PA) exchanges in Paris and Amsterdam.

“Listing on Euronext opens up more access points for investors to conveniently allocate to, and trade, both WisdomTree Bitcoin (BTCW) and WisdomTree Ethereum… This milestone represents the growing acceptance of cryptocurrencies, the evolving European regulatory landscape and the latest signal that digital assets are here to stay,” said Jason Guthrie, head of digital assets, Europe, WisdomTree.

“A willingness from regulators and exchanges to list cryptocurrency ETPs is lending further credibility to this growing and popular asset class. This development will buoy institutional investors, trading via Euronext, that have been waiting for further signs of acceptance before making their first allocations to digital assets.”

Watch: What is bitcoin?

Keep an eye on these 5 Ethereum alternatives

5 min read

By Anastasia Chernikova

In 2013, software engineer Vitalik Buterin proposed that blockchain, the technology that underlies cryptocurrencies, can be used to support not only finance but all sorts of decentralized applications. Buterin’s idea became the basis of Ethereum, the second-largest cryptocurrency and the “world computer,” a platform for running applications without the need for centralized servers.

From social networking to collectible cards, news publishing, and virtual reality games, the Ethereum blockchain powers all sorts of decentralized apps (dapps) today. But as the first blockchain of its kind, Ethereum is not a perfect platform. It suffers from high energy consumption, slow transaction speeds, and high transaction costs. It also suffered from scalability issues, which means transactions and applications become slower as more and more users are added to Ethereum.

In recent years, several other blockchains have emerged that provide platforms for exchanging monetary value and running applications while addressing the shortcomings of Ethereum. Here are five Ethereum alternatives that have great potential and are worth watching in the next few years.

Free TON

Free TON is a high-performance, scalable, and secure blockchain platform with a throughput of millions of transactions per second. It is a spin-off from the Telegram Open Network (TON) project, the original plan of messaging platform Telegram to move its application to its own blockchain.

Free TON runs on multiple blockchains, which gives it the power to speed millions of transactions. The platform supports the development of services and applications for a wide range of sectors, from government bodies to private companies and individual users.

Unlike Ethereum, Free TON is not run and maintained by a centralized organization. It is supported by a decentralized autonomous organization (DAO), a community of diverse parties that use smart contracts to vote and approve changes and directions of the project.

Free TON’s currency is the TON Crystal. Among the key features of the TON Crystal are its fast speed and very small transaction fees. TON users will be able to make transactions for less than $0.01 in fees and pay less than $0.05 per coin exchange transaction (swaps). Free TON also uses the proof-of-stake consensus mechanism to approve and register new transactions on its blockchain, which is much more energy-efficient and environment-friendly than the compute-heavy proof-of-work consensus used in Ethereum and Bitcoin.

Polkadot

Polkadot is a multi-chain network that joins various blockchains together, which is why it is known as the “blockchain of blockchains.” It acts as a framework that makes it easy for developers to create dapps and smart contracts for various blockchains and cryptocurrencies without worrying about the underlying mechanisms that connect them together.

DOT is Polkadot’s cryptocurrency. Aside from its monetary value, DOT allows holders to vote on potential code changes, which then automatically upgrade across the network if a consensus is reached. Like Free TON, DOT uses the proof-of-stake consensus mechanism to verify and approve new transactions.

Since its launch in 2020, Polkadot has climbed to become among the top-ten cryptocurrencies with over $40 billion in market cap and $14 million in 24-hour trading volume. The Polkadot multi-chain already hosts more than 430 projects with more being added every day. And despite being young, it has already been endorsed and listed on several top exchanges. Polkadot also hosts its own decentralized exchange (DEX) platform, Polkastarter.

Cosmos

Cosmos aims to be an “internet of blockchains.” Like Polkadot, Cosmos’s vision is not to have a “blockchain to rule them all” but to have a constellation of blockchains that can coexist and interoperate (hence the name Cosmos). Cosmos has a streamlined model that allows developers to create their own blockchains in a short time. To show the power of the system, the creators of Cosmos used the platform to create an Ethereum clone called Ethermint, which not only supports smart contracts and dapps, but is also compatible with the original Ethereum.

Cosmos is composed of three components. Tendermint is a consensus mechanism that allows developers to create proof-of-stake protocols that are scalable, fast, and secure. The Cosmos SDK is the programming platform that allows developers to build their own blockchains on Tendermint. And the Inter-Blockchain Communication protocol (IBC) is the system that enables different blockchains to communicate with each other.

The native cryptocurrency of the Cosmos network is ATOM. ATOMs give their holder the ability to stake and validate blocks, vote on governance issues, and pay for transaction fees.

EOS

EOS launched in 2019 as a direct competitor to Ethereum. The developers and supporters of EOS market it as “Ethereum for big business” and say it is meant to solve the problems of scale and usability that developers face when building applications on top of the Ethereum blockchain.

Like Ethereum, EOS supports dapps and smart contracts. However, the blockchain outperforms Ethereum in terms of execution and transaction speed.

EOS is owned by the company block.one. Among its developers is Daniel Larimer, who is a veteran of other blockchain projects (BitShares and Steemit) and has allegedly been in touch with Nakamoto in the early days of bitcoin.

EOS’s cryptocurrency is the EOS Token, which is used to exchange value on the EOS blockchain. It is currently among the top-20 most valuable cryptocurrencies. EOS also has an operating system, EOS.IO, which manages and controls dapps and smart contracts on the EOS blockchain. Developers must hold EOS Tokens to be eligible to use network resources and run apps on the blockchain. EOS supports between 10,000 and 100,000 transactions per second, which is why it presents itself as a suitable platform for large-scale businesses.

EOS uses the “delegated proof-of-stake” consensus mechanism, in which token holders elect a limited number of voters to maintain transactions and updates to the EOS blockchain.

Cardano

Cardano is another blockchain that, like Ethereum, is meant to run decentralized applications. Among the key features of Cardano are speed and scalability.

Cardano is developed by three organizations: IOHK, Cardano Foundation, and EMURGO. IOHK is doing the bulk of the engineering effort, and one of the key characteristics that set it apart from other blockchain development teams is its devotion to scientific methods. IOHK works with academic researchers across the globe to peer-review and vet updates before deploying them on the platform. Among Cardano’s founders is Charles Hoskinson, one of the co-founders of Ethereum.

Cardano has already established several robust applications on its blockchain in the banking, identity management, retail, supply chain, and education sectors.

Cardano’s cryptocurrency is ADA, which is supported by the environment-friendly proof-of-stake consensus algorithm and is currently among the top-20 most valuable cryptocurrencies.

Some closing thoughts

While cryptocurrencies and blockchains are still in their infancy in comparison to fiat currencies and centralized banks, they hold a lot of promise and can be the future of money and computing. The landscape is still diverse and fragmented, and not all existing solutions will make it to the finish line. Utility, scale, speed, and community adoption are four key traits to look out for when examining blockchains and cryptocurrencies.

About the author

Anastasia (Nastya) Chernikova is a tech journalist whose articles have been featured in Forbes and Esquire in Russia, Business Insider, Inc.com, and other publications. She has interviewed prominent tech founders, such as WhatsApp founder Jan Koum right after Facebook bought his app for $19 billion, and Vitalik Buterin, Ethereum founder, when his cryptocurrency ether was just in the beginning of its triumph. She is keen on the idea of the decentralized world and what the blockchain brings to the financial system.