In May of this year, the institutional funds flowing into Ethereum surpassed Bitcoin for the first time. This vital signal immediately attracted everyone's attention to this highly potential digital asset. Coupled with the recent slump in the Bitcoin market, many practitioners in the digital currency industry have speculated that Ethereum's performance in 2021 is likely to surpass Bitcoin. As the most popular and valuable cryptocurrency to date, Bitcoin is the first cryptocurrency that uses peer-to-peer technology to provide services for online payments and transactions. In 2021, the price of Bitcoin once soared to a peak of $63,000, but the recent domestic regulatory tightening has led to a decline in the price of Bitcoin. Ethereum is an open-source digital currency. Like most other cryptocurrencies, it also uses blockchain technology to build a decentralized computing network. Each participating user holds a duplicate copy of the public ledger contract—the second most popular and second-largest cryptocurrency by market capitalization.
In recent weeks, the price of Bitcoin has plummeted, and the market value of digital currencies has generally fallen. Still, Ethereum has performed relatively well and has successfully "occupied" nearly 19% of the total market value of digital currencies. Not only that, during the market rebound, when the price of Bitcoin rose by about 42-43%, Ethereum's growth rate reached 280%. In addition, recent data also shows that the volume of decentralized transactions on the Ethereum blockchain has increased by 8500% in the past 12 months. This indicator reflects that the Ethereum user base and the actual economic scale are increasing significantly. Now people can do many things on Ethereum, including running decentralized applications, conducting transactions, etc. Therefore, there are speculations in the digital currency market that Ethereum may continue to maintain a bullish trend and reach a value of 5 digits or higher shortly. So, is the reality that Ethereum has begun to "surpass" Bitcoin? Is it the best time to invest in ETH right now? Next, let us focus on comparing Bitcoin and Ethereum based on the current market conditions. From the collected data, it can be seen that although Ethereum's performance is relatively strong, due to market adjustments and panic, coupled with the recent increase in regulatory pressure, Ethereum's growth pattern in recent months has reversed, especially in recent weeks. , The price of Ethereum fell. At present, the price of Ethereum fluctuates at around US$2,000. Compared with the historical high of US$4,700, the current price still has a large gap. However, the current short-term panic in the market has not affected the pace of development of Ethereum. If you pay attention to some essential webcasts, you will find that almost all of them show a growth trend. If we only look at its growth rate, it may reach the "trillion-dollar market value" level shortly. In the past 12 months, we found that the total value locked in Ethereum smart contracts has increased by more than 9000%. The number of users has also increased tremendously, which seems to imply that Ethereum has grown to a "trillion-dollar" level. Market potential. So what are the factors that drive the number of Ethereum users to grow so fast? First of all, we see that some users "purely" buy and hold ETH, and some users need to send stablecoins (or similar digital currencies) to transfer funds; secondly, some users will use DeFi to make some loans or Loan activities, and income farming (liquid mining) activities; then some users will conduct lottery transactions or purchase insurance policies. In contrast, although Bitcoin has promoted the emergence of some new things, such as the lightning network (lightning network) and the sovereign network (sovereign network), people have also placed high hopes on these new things and new frameworks. Still, the actual situation does not seem to be As good as imagined. Because Bitcoin is not suitable for payment, not many people lock Bitcoin into the Lightning Network. In most cases, the total amount of Bitcoin locked in the Lightning Network has not risen sharply, and the size of the Lightning Network has not grown correspondingly. Compared with the scale of the ecosystem and the total amount of settlement on the chain, Ethereum has shown explosive growth. Incredibly, the current average daily on-chain settlement of Ethereum is 46.37 billion U.S. dollars. In comparison, Bitcoin is about 15 billion U.S. dollars, and most Bitcoin on-chain settlement transactions come from investors and traders. They Send bitcoins to exchanges for sale in exchange for cash or withdraw them to cold wallets after buying bitcoins on exchanges. From the perspective of the above economic activities, it can be said that Ethereum is "surpassing" Bitcoin step by step. Not only that, Bitcoin is just something called "digital gold," and applications based on Bitcoin are rarely seen. But people can do many exciting things on Ethereum, such as borrowing, buying NFTs, etc., which Bitcoin can't do. In addition, Bitcoin mining also has a severe energy consumption problem. In contrast, Ethereum is shifting from a Proof of Work (PoW) to a low-energy Proof of Stake (PoS) consensus algorithm, which eliminates the problem of mining. Series of environmental issues. In addition, there are countless other advantages of Ethereum, such as its ecosystem can provide developers with a massive store of value; it provides infrastructure for most decentralized financial applications; it provides solutions for creating new applications; carbon emissions The rate will be reduced from 4.5% to 0.5%; it is worth mentioning that Ethereum is about to upgrade EIP-1559, introducing a deflation mechanism in ETH, and every transaction will turn ETH into a deflationary asset, which means tokens The value store attribute will become more and more prominent, which in turn will promote further price increases in the next few years. Therefore, if you compare Ethereum and Bitcoin from these perspectives, Bitcoin cannot be compared with Ethereum in energy usage, value storage, or infrastructure. Ethereum is constantly upgrading in the process of transforming towards proof of equity, and Bitcoin is indeed a very conservative digital currency. If Ethereum 2.0 is completed, its network operation energy consumption may only be one-thousandth of Bitcoin. And as Ethereum is about to complete all upgrades shortly, the market performance is bound to show exponential growth.
0 Comments
Leave a Reply. |
Sophie
Share various useful investment information for reference only. Archives
January 2022
Categories |