Ethereum is currently the second largest cryptocurrency in terms of capitalization, but remains far behind Bitcoin. Indeed, while BTC has a total capitalization of more than 1 trillion dollars, ETH has a capitalization of just over 200 billion dollars.
However, according to some analysts, the expected updates of Ethereum could upset this situation, and make Ethereum pass before Bitcoin.
In particular, this is what Ryan Watkins, a senior research analyst at crypto-currency analytics firm Messari, predicted yesterday as quoted by Cointelegraph. He speculated that Ether (ETH) could overtake Bitcoin (BTC) as the largest crypto-currency once the Eth2 and proof-of-stake review is complete.
Appearing on YouTube's FinTech Today on March 18, Watkins said that while he doesn't know "if or when" Ether will dethrone Bitcoin, he believes Ether could become the leading cryptocurrency in the future, thanks to Eth2:
"The selling point of Bitcoin over Ethereum as a store of value comes down to the fact that monetary policy is very predictable and the Bitcoin blockchain is very secure. I think with the move to Eth2 and proof of stake, [...] Ethereum can actually potentially be more secure than Bitcoin."
Watkins also highlighted the changing underlying economics of Ether in the Eth2 transition, pointing to expectations that Ethereum's upcoming mechanism will result in Ether being destroyed at a greater rate than new units being created.
"Ethereum's monetary policy will change in Eth2 so that it will not only be less inflationary than Bitcoin, but also deflationary. So every year there will actually be less and less Ether in circulation."
He posed the question, "If Ethereum is safer and [has] stronger monetary policy, then what is the argument for Bitcoin in this scenario?"
Watkins also noted the "massive" and "diverse" economy being built on Ethereum, suggesting that the network's burgeoning decentralized application sector will attract new users at a faster rate than Bitcoin.
"At some point, the Ethereum economy is starting to attract so much capital, both human capital and financial capital, that it is actually a force in the global economy," he said. "Ethereum's GDP actually rivals that of many major countries."
"People can make a living in this economy," he added.
Source: Website
Post a Comment