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Both blockchains are relatively close to one another in terms of market cap, with Bitcoin currently holding around $170 billion and Ethereum at around $15 billion [outdated], though Ethereum’s market cap is increasing more rapidly. The two blockchains each have their own strengths and weaknesses, and it’s hard to say who will eventually win the race, though some commentators have already begun to make their predictions.
So which one will survive? What are the key points in which they differ? Who will be the eventual winner? And what will each winner look like?
The Eureka! Moment
Ethereum’s strengths are its smart contracts, which are the foundation of the Ethereum platform. Smart contracts are programs written in code that function much like programs written in code that run on other blockchains. Within the Ethereum network, these programs are recorded and stored in a network of computers called “miners,” the same way that the Bitcoin blockchain stores transactions.
Though Bitcoin and Ethereum share much of the same code, they each have their own unique features that make them different from one another. Bitcoin’s code is written in such a way that allows it to process the Bitcoin blockchain in a timely fashion, while Ethereum’s code is designed to process smart contracts more quickly. The Ethereum blockchain can also handle far more transactions than the Bitcoin blockchain, and this is one of the reasons why Ethereum saw such a large increase in its value and market capitalization in its short history.
Another strength of Ethereum is its focus on dApps. The ERC20 token standard allows companies to release their own tokens that can be traded on the Ethereum network. In addition, the Ethereum network allows for the creation of decentralized autonomous organizations (DAOs), which are organizations that are controlled by a network of people rather than a central entity.
And of course, there’s the possibility for developers to create their own blockchains, and Ethereum, which is a public blockchain, is a popular choice for this.
Bitcoin’s strengths are in its decentralized and censorship-resistant nature, which allows it to be more secure and stable than the Ethereum blockchain. The network is also slightly more difficult to scale, meaning that the time it takes to complete a transaction on the Bitcoin network is slower than it is on the Ethereum network, but this isn’t a problem.
Bitcoin’s weaknesses include its relatively high transaction fees and transaction speed. Bitcoin’s transaction fees are much higher than those on the Ethereum network, and Bitcoin doesn’t have a native token, which makes it more difficult for businesses to use.
The Eureka! Moment?
The Eureka! Moment is the point in time when a new system or technology becomes so popular that the momentum begins to shift.
Bitcoin’s Eureka! Moment occurred in early 2013, when the currency rose from $500 to $1,000 in just six months, doubling in value. While Ethereum’s Eureka! Moment occurred in mid-2015, when the currency rose from $3 to $30 during a single 24-hour period, doubling in value.
An important note is that the Eureka! Moment for both blockchains came at different times, and by different means. Ethereum’s Eureka! Moment resulted from the creation of the smart contracts that are the foundation of the Ethereum blockchain. Bitcoin’s Eureka! Moment was caused by the creation of the first Bitcoin blockchain.
The Race Ahead
The race for the Eureka! Moment is currently in full swing. Ethereum has already passed Bitcoin in terms of market capitalization [not true, see here], and it’s likely to continue to gain momentum. As its Eureka! Moment approaches, Ethereum is already seeing a number of new dApps.
There are now more than 1,000 dApps on Ethereum, and the number of dApps on Ethereum is constantly growing. In total, Ethereum boasts more than 2,000 dApps, and many of these are on the Ethereum network [outdated].
As time goes on, the current market capitalization for both blockchains is likely to shift, with Bitcoin remaining at around $170 billion and Ethereum likely to reach around $100 billion [outdated], though it’s likely that Ethereum will surpass Bitcoin in terms of overall market capitalization.
So who will win? Will it be Ethereum, which has a decentralized and censorship-resistant nature and is primed for the future? Or will it be Bitcoin, which has a decentralized and censorship-resistant nature and is primed for the future? Or will it be something else entirely?
The most likely thing is that Bitcoin will lose the competition, since it’s seen as too slow and expensive to scale up. It won’t be long before Ethereum overtakes it though, since Ethereum is a much more efficient blockchain than Bitcoin.