Ethereum is a new darling of the cryptocurrency fans. It has been growing at a faster pace than Bitcoin, and its platform is also more powerful.
Nevertheless, it may not beat Bitcoin in the near future, but that doesn’t mean it won’t keep growing. Quite the contrary, I would say these are good times for Bitcoin and Ethereum holders both of whom get to benefit from the increased traction the two of the most popular cryptocurrencies have.
So we can’t just say – Ethereum will or will not beat Bitcoin. It’s more complicated…
Ethereum is on the roll
In some earlier articles we have discussed the bright future of Ethereum. And we’re not alone in that belief, with many experts from across the field agreeing the “Ethereum journey” has just started.
Beyond experts we have companies like Microsoft, Intel, J.P. Morgan, Merck, Deloitte, Accenture, ING, and National Bank of Canada committing to support the platform; in March 2017, various blockchain start-ups, research groups, and select Fortune 500 giants have joined forces to form the Enterprise Ethereum Alliance (EEA), which aims to “coordinate the engineering of an open-source standard and private ‘permissioned’ version of the Ethereum blockchain that can address the common interests of enterprises in banking, management, consulting, automotive, pharmaceutical, health, technology, mobile, entertainment, and other industries, while working with developers from the Ethereum ecosystem.”
Unsurprisingly, the price of ether went up on the news of EEA’s formation.
And while we’re talking about that “permissioned” version of the Ethereum blockchain, you may want to know that things are already happening on that front, with J.P. Morgan Chase working on such a system. Dubbed “Quorum,” it is designed to toe the line between private and public in the realm of shuffling derivatives and payments; it aims to satisfy regulators who need seamless access to financial goings-on, while at the same time protecting the privacy of parties that don’t wish to reveal their identities nor the details of their transactions to the general public.
Another example comes from Royal Bank of Scotland, which has built a Clearing and Settlement Mechanism (CSM) based on the Ethereum distributed ledger and smart contract platform.
Like that was the case with “centralized internet services,” financial institutions are among the first ones to benefit from the new technology. That trend, however, is expected to quickly move to other verticals such as healthcare, supply chain management, and more.
The point of all this is that Ethereum is better designed system than Bitcoin; it goes beyond peer-to-peer money transfers to also allow Decentralized Apps (Dapps) to run on top of it. And with big companies noticing the benefits, we can clearly see the bright future ahead of Ethereum.
But Bitcoin is the gold standard…
It was not only the first on the market — which means a lot — but it will be a more limited commodity that will top at 21 million bitcoins issued/mined. In comparison, Ethereum does NOT have such limitation which is both good and bad.
The good thing is that there will be plenty of ether out there, making it more viable to be adopted as a mainstream cryptocurrency; the bad thing is that the “scarcity factor” could work in bitcoin’s favor, making it more valuable than ether.
But the value of a single cryptocurrency token is not the only number to look at — if we’re talking about the capitalization of both currencies, we could see Ethereum surpassing Bitcoin as early as 2018. This scenario presumes there are more ether coins out there than bitcoins. And once that threshold is reached — and all the media starts reporting about it — we expect ether to grow even further, eventually helping it “beat bitcoin,” at least for the moment.
However, I would say that once the market cap of Ethereum surpasses that of Bitcoin, we can say that Ethereum has “won.”
Does it really matter?
In the conclusion we want to argue that it doesn’t matter a lot if Ethereum beats Bitcoin. We expect this to be the tide that lifts all boats, with many cryptocurrencies appreciating in value as a result. The market is big enough for both Bitcoin and Ethereum, as well as some other cryptocurrencies.
Right now there are more than 900 cryptocurrencies many of which are simply ridiculous. It is only natural that many of them will die out; as far as Bitcoin and Ethereum are concerned — we expect both of them to prosper, with Ethereum likely growing at a faster pace in the foreseeable future.
That being said, we must that this article doesn’t intend to provide an investment advice, and we expressly disclaim any liability, including in respect of direct, indirect or consequential loss or damage.
If you want to invest in Ethereum, Bitcoin or any other cryptocurrency — you are risking losing money. It’s an investment after all, and like any investment – it comes with a risk. As well as potential (high) rewards. So are you going to bet on it? Or miss out on the opportunity? It’s your call…