Could Ether Overtake Bitcoin and Become the World’s Most Valuable Cryptocurrency?
Ether, Ethereum’s native cryptocurrency, has for a long time been the second most valuable cryptocurrency after Bitcoin. It seems natural that Bitcoin, being the first cryptocurrency and set apart from all altcoins in its own category, should remain the most valuable cryptocurrency and have the largest market capitalization.
So far it has been able to maintain a firm hold on the number one spot, but there are many people who believe that Bitcoin’s days as number one may be numbered. Let’s take a look at some of the people who have made this claim, why they think this, whether it seems possible, and what timeline might be likely if Ether does in fact become more valuable than Bitcoin.
Who Believes That Ether Will Become the Most Valuable Cryptocurrency?
It goes without saying that many of the strongest supporters of Ethereum and Ether believe that it is only a matter of time before Ether overtakes Bitcoin. Ethereum has one of the strongest communities in the crypto space, which is interestingly enough one of the reasons listed by many as to why Ether could overtake Bitcoin eventually.
Ethereum’s network value and innovation are also regularly mentioned. Ethereum is more scalable and provides more uses, such as smart contracts. Finally, Ethereum will move to a Proof-of-Stake consensus algorithm which is more energy efficient than the Proof-of-Work algorithm that Bitcoin will continue to use due to the use of a scalability solution.
Ether’s Support From Financial Advisors
Nigel Green, the CEO and Founder of deVere Group, one of the largest independent financial advisory organizations in the world, has gone on record saying that he believes Ethereum’s rise to becoming the most valuable crypto “seems unstoppable.” He anticipates that Ether will exceed Bitcoin’s value “probably within 5 years.” He attributes this likelihood to two main factors, one being Ether’s higher level of real-use potential and it’s status as the leading development platform for smart contracts, and two being the highly anticipated transition to Ethereum 2.0.
Ether’s Support From Crypto Research Firms
Not only are there people from the Ethereum community and traditional financial institutions who believe that Ether will become the most valuable cryptocurrency, but some leading crypto research firms have indicated that they also believe Ether could surpass Bitcoin. In March 2021, an analyst at the cryptocurrency research firm Messari stated in an interview with Fintech Today that the switch to Ethereum 2.0 will present changes to Ether’s monetary policy that could lead Ether to assume the position of the most valuable cryptocurrency in the future.
Ether’s Support From Goldman Sachs
Goldman Sachs went so far as to tell its clients that Ether could eventually overtake Bitcoin, citing the Ethereum’s smart contract capabilities, its status as the first programmable blockchain, and the fact that thousands of decentralized applications (dApps) run on top of the platform as their reasoning for the claim.
Ether’s Connection to the DeFi and NFT Infrastructure
These reasons, combined with the fact that much of the DeFi and NFT infrastructure runs on the Ethereum blockchain, have prepared the Ethereum network for continued growth and influence within the blockchain space.
Although it is still far behind Bitcoin in terms of price, early in 2021 it was reported that Ether had surpassed Bitcoin in terms of gains in a given period, causing many investors to focus their attention on Ether.
ETH 2.0 is expected to reduce network congestion, possibly increasing the transaction speed, and giving Ether another potential advantage over Bitcoin.
A Closer Look At the Reasons Why Ether Could Become the Most Valuable Cryptocurrency
Here is an in-depth look at the main reasons for Ether’s success.
Scalability and Energy Consumption
Ether is more scalable than Bitcoin, and this is likely to only increase when Ethereum moves to the Proof-of-Stake consensus algorithm. Part of the reasons that Bitcoin’s Proof-of-Work system is not scalable is that it requires large numbers of powerful computers running 24/7.
This causes the network to be heavy and slow, and uses a lot of energy due to the computing power needs. As the blockchain grows in a proof-of-work system and more blocks are added, the computational power needed grows also, preventing scalability and requiring additional energy. This makes Proof-of-Work less energy-efficient.
Proof-of-Stake allows for the implementation of a scalability solution referred to as “sharding” where blocks are broken up into smaller, more manageable sections known as shards.
Ether and Smart Contracts
Ether’s real-use potential and Ethereum’s status as the leading development platform for smart contracts could position it to pass Bitcoin eventually, as Bitcoin is primarily known for its status as a transaction platform. It does not enable smart contracts, and the Bitcoin blockchain doesn’t have thousands of decentralized applications running on top of it.
Bitcoin’s use is purely as a platform for transactions. By creating an entire ecosystem of projects and acting as a computer that software programs (in the form of dApps) can run on, Ethereum and it’s native token Ether can be used in a variety of additional ways that Bitcoin does not enable.
All transactions that occur on the Ethereum platform use Ether, and Ether is used within the applications that run on top of the Ethereum blockchain as well, providing it with more uses.
Ether and the Transition to Ethereum 2.0
In addition to boosting scalability, Ethereum 2.0 will also boost the security and sustainability of the network, ultimately offering welcome improvements to the current system that Ethereum uses. These improvements will undoubtedly have an impact on Ethereum’s native cryptocurrency, Ether, as well.
Importance to the DeFi and NFT Infrastructure
Many of the applications that are associated with decentralized finance (DeFi) are built on top of Ethereum, which is used to build decentralized applications that provide additional functionality besides simply enabling transactions. Due to DeFi’s importance to the overall goals and mission of the crypto space, and Ethereum’s importance to the overall existence of DeFi and DeFi applications, as DeFi grows in popularity and notoriety, so too will Ethereum and Ether.
Ethereum was also the first blockchain to support Non-Fungible Tokens (NFTs) through developing the ERC-721 standard. Today, most NFTs are part of the Ethereum ecosystem, although some other blockchains have implemented their own NFTs as well.
Ethereum’s influence on two of the most important developments within the crypto space, DeFi and NFTs, could also contribute to positioning Ether to overtake Bitcoin eventually, but will that actually happen?
A Conclusion to the Analysis of Ether’s Chances at Becoming the #1 Cryptocurrency
Although the reasoning mentioned in this article and the statements by influential figures in crypto and finance present a compelling case for Ether eventually claiming the title of world’s most valuable cryptocurrency, the truth is that until it actually happens, it’s just conjecture.
It’s also anyone’s guess when it would be likely to happen. What is for certain, though, is that Ether has been positioned as one of the most useful cryptocurrencies in existence, and its many use cases ensure that it will likely continue to be one of the most influential cryptocurrencies in the market.
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