Ethereum, the second largest cryptocurrency has been doing very well lately, and this has some people contemplating whether it'll surpass bitcoin in the near future. Ethereum is a little different from bitcoin, both in its technology and purpose.
This is one of the reasons why some people think it might beat bitcoin. Well, let's, see exactly how well it's been doing compared to bitcoin and its potential welcome back to crypto lion. This is your one: stop shop for news and updates about bitcoin, ethereum and other cryptocurrencies.
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[ Music ] financedigest.com defines ethereum as a computing platform which provides scripting language for smart contracts. This means that there is a blockchain upon which a number of contracts can be written and automatically executed.
Should a set series of events occur as with most blockchains. Ethereum is open source, which means that anyone can use it to write and implement smart contracts, which are simply a series of promises in digital form.
Ether is the unit of value deployed on the ethereum blockchain and consequently, it shares certain characteristics with bitcoin. It's, a potential store of value and is fungible between persons who perceive it to have value.
So what are blockchains blockchains are online ledgers that keep permanent tamper-proof records of information. These records are continually verified by a network of computer nodes, similar to servers which are not centrally controlled by anyone.
Ether is just one of over 8 000 cryptocurrencies that use some form of this technology, which was invented by the unknown satoshi nakamoto when he released bitcoin over a decade ago, the ethereum blockchain was first outlined in 2013 by vitalik bateran a 19 year old prodigy was Born in russia, but mostly grew up in canada after crowdfunding and development in 2014, the platform was launched in july of 2015.
, as well as with the bitcoin blockchain. Each ethereum transaction is confirmed when the nodes on the network reach a consensus that it took place. These verifiers are rewarded in ether for their work in a process known as mining, but the bitcoin blockchain is confined to enabling digital decentralized money, meaning money that's, not issued from any central institution like say dollars, ethereum's.
Blockchain is categorically different in that it can host both other digital tokens or coins and decentralized applications. Decentralized applications or dapps are open source programs developed by communities of coders not attached to any company.
Any changes to the software are voted on by the community using a consensus mechanism. Perhaps the best known applications running on the ethereum blockchain are smart contracts, which are programs that automatically execute all or parts of an agreement when certain conditions are met.
For instance, a smart contract could automatically reimburse a customer. If say, a flight was delayed more than a prescribed amount of time. Ethereum has evolved and developed since its launch. Six years ago, financial interest in ether tends to follow in the wake of bitcoin rallies because it's, the second largest cryptocurrency and, as such quickly draws the attention of new investors all the same.
There are other factors behind its recent rally. The first is the pace of innovation on the platform most activity in the cryptocurrency space happens on ethereum. In 2020 we saw the emergence of decentralized finance or defy defy, is analogous to the mainstream financial world, but with the middleman banks cut out, users can borrow trade, lend and invest through autonomous, smart contracts via protocols like compound ave and urine finance.
It sounds like science fiction, but this is no hypothetical market. Approximately 24 billion dollars is locked into various d5 projects. Right now, importantly, defy allows users to generate income on their cryptocurrency holdings, especially their ether tokens.
The second factor behind the ether surge is the launch of ethereum 2.0. This upgrade addresses major concerns impacting the current version of ethereum. In particular, it will reduce transaction fees, especially useful in d5 trading, where each transaction can end up costing the equivalent of tens of us dollars.
Ethereum 2.0 will also eliminate the environmentally wasteful mining currently required to make the ethereum blockchain function. The same is true of many other cryptocurrencies, including bitcoin. Within the year, ethereum should be able to drop the need for vast industrial mining warehouses that consume huge amounts of energy.
Instead, transactions will be validated using a different system known as proof-of-stake. The fact that ethereum addresses problems like these quickly, rather than letting them sit, could prove a major differential from the sometimes sluggish and conservative pace of the bitcoin development culture.
Computer.Org reports that ethereum 2.0 has some major changes that could end bitcoin's. Blockchain dominance. The columnist stated that since the beginning of the crypto wave, the clear consensus choice has been bitcoin, which has sat atop the market capitalization charts from the earliest days.
He mentions that most experts, don't expect this to last. However, as the grandfather of all cryptocurrencies, the bitcoin blockchain is beginning to show its age. It suffers from a variety of real-world limitations, not least of which its inability to scale seeking to replace it in the race for dominance.
A variety of alternative blockchain implementations have risen up to solve some of the inherent problems associated with bitcoin's blockchain, but so far none have managed to capture any significant slice of the market.
The one notable exception is ethereum, which has long been the lone large-scale competitor to bitcoin. For its part, though, more advanced than bitcoin ethereum also suffers from issues that it would need to overcome to achieve market dominance, that's, exactly what the developers behind ethereum hope to accomplish, with their upcoming upgrade of the underlying blockchain ethereum 2.
0. A final factor according to the conversation.com is the launch of ethereum futures trading. This means that traders will be able to speculate on what ether will be worth at a given date in the future for the first time, a hallmark of any mature financial asset.
Some analysts have said the recent bitcoin rally has been fueled by traditional investment firms, and the launch of ethereum futures is often touted as opening the doors for the same price action. However, as every seasoned cryptocurrency user knows, both currencies are extremely volatile and are as liable to crash by extremes as rise by them.
Bitcoin's. Price fell: 85 percent in the year after the last bull market in 2017, while ether was down 95 at one stage from its previous high of 1 428 ibtimes.com reports that ethereum's, price is poised to reach 10 500 according to fundstrat global advisors.
On the back of the growth surrounding the centralized finance and also fees and inflow from institutional investors, fundstrat said its target price of ten thousand five hundred dollars is fueled by ethereum, continuing to power, more real-world applications, including smart contracts, stable coins and decentralized finance apps.
According to a note, fundstrat sent to investors that was obtained by yahoo finance fundstrat said they continue to believe ethereum fundamentals are incredibly strong and that they think it represents the best risk reward.
Investment play in crypto ib times stated that ethereum has a lot going when compared to bitcoin, whose primary narrative is that of a store of value. Another article from ibtimes.com also analyzed metcalfe's law.
It reports that analysts have said that if metcalf's law is to be followed, ethereum could likely hit twenty thousand dollars, just as bitcoin did in the past. According to macro trader raul, pal metcalf's.
Law could be the key to pinpointing the future price of ethereum, just like it was for bitcoin. After examining data from the point, when bitcoin first hit 1 million addresses and applying that to ethereum pal said, the price chart appeared similar metcal's.
Law states that the effect of a telecommunications network is proportional to the square of the number of connected users of the system, simply put the more users there are on the network, the more that network will grow on its own in a separate report seeking alphas dh Taylor, who studied macroeconomics and statistics, also posited that when one looks at ethereum's, network size, number of connections and price trajectory, metcalf's.
Law is being manifested in a way that actually exceeds that of bitcoin's. Movement. Taylor did admit that metcalfe's. Law could be applied to cryptocurrencies in general. In the same way, the law originally meant for telecommunications has been applied to the growth of networks such as facebook.
Taylor wrote that the more people integrate cryptocurrencies in their lives. The more that cryptocurrencies are being accepted and that growth continues to push cryptocurrencies in general, according to modernconsensus.
com raul. Pal also believes ether has the potential to have a larger market cap than bitcoin. Over time they reported that, indeed, ether's. Outperformance of bitcoin has become a recurring theme of late, pointing out that ethereum surged by 482 percent over the whole of 2020, which is well above bitcoin's.
Growth of 300 percent pal went on to say that he plans to reallocate his crypto holdings when the next correction occurs. He explained that he has previously owned much more bitcoin because of how it is a mature asset, but now plans to increase his ethereum weighting from 17 to 35.
He also stressed that, while bitcoin and ethereum's, charts may look the same. It's, bad practice to pit different cryptocurrencies against each other. He believes that the future is interoperable and that one day different, blockchains and cryptocurrencies will be seamlessly connected.
He gave a clever example that he's. Writing on a microsoft word, application on an apple mac and that he'll upload it to dropbox for someone else to edit. It makes us really look into what the future holds for these cryptocurrencies and their surrounding technologies.
What do you think? Do you think ethereum will smash bitcoin? Let us know your thoughts in the comments below don't forget to like this video by clicking the thumbs up button and subscribing to our channel.
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