In the world of cryptocurrency, there’s always a new coin angling for precious market share. While many seemingly more ambitious projects have arisen, nobody seems to be able to topple Bitcoin, the reigning king of cryptocurrencies.
ETH currently sits at number two, but even this coin, with its robust features and new advancements has not yet secured the top spot. Why is that? Well, it could likely have to do with branding, and the first comer advantage.
While Ethereum does have its own high profile supporters, Bitcoin was still first. It’s the first cryptocurrency that people hear about, and it’s often the first one that they purchase in order to make their way into other cryptocurrencies.
While popular cryptocurrency hubs like CoinBase do offer the ability for users to purchase Ethereum, it’s often not the first choice for trading. If you take a look at the liquidity for most coins, Bitcoin is almost always the winner. This could very well be because of the way these currencies work.
BTC is a currency, but Ethereum is actually a utility chain. The prices are also significantly different, due to the much larger circulating supply of ETH, but we can see that by market cap, the number two contender is gaining. Will Bitcoin be able to keep up? That’s impossible to know for now, however Ethereum does have some very interesting updates on the horizon.
Once they release plasma and sharding, we may see some additional volume pump into this coin. The number of projects built upon their chain grows everyday, and they offer services beyond what Bitcoin is capable.
Some who would invest in Bitcoin are slightly worried that the king may be dethroned, but no one can seem to decide exactly which coin would be capable of doing so. ETH seems a likely competitor, though they don’t really share the same goals. However, if the Ethereum network becomes capable of producing faster and cheaper transactions they could very well see themselves as the new reserve currency.
When people are looking for a base currency, they typically want something that will be the most stable. While stability is often a laughable concept in cryptocurrency, Ethereum is one of the better options. They also need availability, and in this regard ETH has been growing in adoption.
As this is the biggest advantage that Bitcoin has, it seems likely that over time ETH may be able to push through here. Once this happens, their capabilities may prove too much for the legacy currency to keep up with.
What’s more is that ETH will also be making a move to proof of stake. While BTC mining has long risen out of the reach of the average user, now there may be a chance for them to acquire income from staking their investments. This will be very attractive to many people, but especially to mainstream investors who want passive income but have no desire to learn about the more complicated aspects of Proof of Work mining.
This method is also much more ecologically friendly, which is becoming a greater and greater concern for many inside and outside the cryptocurrency space. A large scale currency adopting this model could silence many of those objectors, and the nature of proof of stake will allow for transactions to proceed unhindered by the traditional encumbrances of Proof of Work set ups like BTC continues to utilize.
After the BCash debacle, it does seem that the BTC main network is unwilling to change, and that very well could be this coin’s downfall. While it’s unlikely that people will stop using BTC altogether, it is very possible that another more innovative coin could steal market share away.
While the technology behind everyone’s favorite legacy cryptocurrency continues to stagnate, ETH and its team will continue to innovate new developments that solve real world problems. There’s nothing wrong with just being a currency, but it’s likely that in the future that will not be enough.
For this reason, an Ethereum analysis looks promising, and we very well could see it crowned the top cryptocurrency as more and more people, crypto enthusiasts included, grow tired of the slow and expensive experience that BTC has become.
Posted by Steve on behalf of our guest contributor.