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?

Are Non-Fungible Tokens Breaking Ethereum?

Periodic booms in cryptocurrency valuations come and go. In March of this year, Bitcoin hit an all-time high of $60,000 per coin, making the previous “boom” of 2017 pale in comparison.

Increases in the valuation of Bitcoin generally result in a corre­sponding rise in the values of other cryptocurrencies and a conse­quent increase in the interest in blockchain technologies. As the value of Bitcoin rises, so do the values of all other cryptocurrencies such as Ethereum (ETH). It’s easy to think of Ethereum as being the “silver” to Bitcoin’s “gold.” But in reality while the Bitcoin blockchain is used for virtually nothing but trading Bitcoin, the Ethereum blockchain is also a platform for executing program logic on the blockchain (smart contracts). These smart contracts power an increasingly diverse family of distributed applications. Moreover, while the core technologies underpinning Bitcoin are fairly static, the Ethereum network is poised to undergo several major techno­logical shifts.

Proof of Work

The Ethereum and Bitcoin blockchains origi­nally shared the same core algorithm for securing transactions— the Proof of Work protocol. This protocol is what makes public blockchains immune from hacking—one would have to apply computing power equivalent to the entire distributed network of blockchain nodes to falsify a transaction. Proof of Work is a truly unique innovation allowing a distributed system to guarantee the integrity of its data records. However, Proof of Work is computa­tionally and environmentally very expensive and limits the trans­actional throughput that can be supported by the network.

The limits of Proof of Work on Ethereum were seen in 2017 during the “CryptoKitties” boom. CryptoKitties started as a game on Ethereum, which allowed players to breed “digital cats.” Each cat’s unique identity was stored on the blockchain, and each cat had a unique genetic makeup. Some “Kitties” became immensely valuable and intensely traded, but the delays in processing Ethe­reum transactions during peak processing brought the Ethereum network to its knees.

NFTs

Recently, we’ve seen a similar boom in another category of mostly Ethereum-mediated digital assets. Non-fungible tokens (NFTs) are Ethereum-based identifiers that are associated with real-world assets. Normal Ethereum tokens are “fungible”—my ETH coin can be exchanged for your ETH coin. However, an NFT is tied to a specific asset in the real world and cannot be converted into anything else. NFTs have been created that represent the ownership of artwork, in-game items, or collectibles.

Part of the NFT concept makes a lot of sense—a block­chain-based token can indeed be used to transfer ownership of an associated real-world item without the need for third-party mediation. However, a lot of NFTs have been created that appear to be associated with intan­gible or easily copied digital artifacts. For instance, Twitter co-founder Jack Dorsey’s first tweet was “sold” as an NFT for 1630 ETH ($2.9 million)!

Ethereum Enhancements

Whatever you think about NFTs, the increase in load on the Ethereum network has created another scalability crisis. Ethereum transaction fees are going through the roof, and delays on the network are increasing. If Ethereum is going to compete successfully against up-and-coming alternative chains such as Hedera Hashgraph, something has to be done to improve the throughput of the network. Luckily, we are on the verge of several big paradigm shifts in Ethereum with ETH 2.0, which may pave the way for greater throughput.

Firstly, the Ethereum “Beacon Chain” has introduced an alterna­tive to Proof of Work for confirming transactions. Proof of Work is replaced with “Proof of Stake,” in which validators stake an amount of Ethereum as a guarantee of integrity. While with Proof of Work, you would have to assemble an unreasonable amount of computing power to falsify a transaction, with Proof of Stake, you would need to assemble an unreasonable amount of Ethereum currency. Secondly, “shard chains” will allow the Ethereum network to be partitioned into multiple blockchains that can operate in parallel, increasing throughput proportionally. Both enhancements are due in 2021.

Given the already intense activity on the Ethereum network and the rapidly rising capitalization of Ethereum it’s likely that these changes will result in a substantial uptick in Ethereum utili­zation. The increase in value of the Ethereum currency is already outpacing Bitcoin’s meteoric rise. It is not inconceivable that fol­lowing the introduction of ETH 2.0, Ethereum will compete with Bitcoin as the dominant blockchain.

NVIDIA Bets On Miners, Promises Top Cards Won’t Limit Ethereum Hashrate

The cryptocurrency mining of the potentially latest graphics processing units (GPUs) announced by the industry’s leader Nvidia Corporation (NASDAQ: NVDA) will not be curbed by the company.

What Happened: During Nvidia’s Keynote at Computex 2021, the company announced its upcoming top-of-the-line 3090 GPU series.

While the firm’s 3060, 3070, and 3080 — and the relative Ti higher performance models — will feature the Lite Hash Rate system reducing their mining efficiency, no such feature was announced for the 3090 series. NVIDIA previously admitted that the feature had not been that effective in the first place.

The reason is presumably that the 3090 occupies a high enough price point that its demand by either gamers or miners is generally limited.

Cryptocurrency miners — especially those mining Ethereum (CRYPTO: ETH) — drove the prices of Nvidia’s 3000 range on the secondary market up to 300% higher than retail.

At the same time, the company announced that while it had benefitted from record revenue in the first quarter ended May 2, only 2.7% of it came from mining chips sales.

See also: Just 2.7% Of Nvidia Revenue In Blowout Quarter Came From Crypto Mining Chips, But That’s Not The End Of Story

The announcement follows Nvidia being targeted with a class-action lawsuit over the losses reported by the company when lower crypto prices diminished demand for GPUs by miners in 2018.

The lawsuit at the time claimed that the GPU producer promised that any drop associated with cryptocurrency miners “would not negatively impact the Company’s business because of strong demand for GPUs from the gaming market.”

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