Bitcoin has long been, since blockchain and crypto became part of the conversation in financial markets, the market leader, the conversation starter, and the dominant force of any metric. With a market capitalization of over $ 1 trillion, major purchases by organizations known as Tesla
On the other hand, however, the ether and the Ethereum blockchain have made rapid progress in terms of crypto-valuation and the other applications developed on this blockchain. Taking a step back and putting aside the price watch that captivates market analysts and participants every day, Ether and Ethereum have really been the main story in the second half of 2020 and 2021.
Aside from the current ether price rally, many blockchain applications that have captured the attention and attention of the mass market have been developed and are running on the Ethereum blockchain.
While bitcoin has continually (and rightfully) continued to lead the larger crypto conversation, it is worth arguing that, in terms of applications and use cases, the ether and the Ethereum will take the next step in blockchain implementation. In other words, it looks like there will be – for the first time in a conversation in the financial markets – open competition to determine which protocols and cryptocurrencies are going to move the industry forward. Let’s outline what are some of the fundamentals that the market will need to assess in the future.
Applications versus transactions. One of the most heated debates in recent years is the back and forth over whether crypto can actually be used for transactions, rather than just being held as a speculative investment. In the United States, at least, it looks like the tax treatment will remain as all cryptocurrencies are treated as property for now; this has very diverse implications.
In addition to not really reflecting the functionality or use cases of many cryptocurrencies, especially stablecoins developed to serve as a medium of exchange, potential tax returns and obligations continue to discourage the use of the currency. crypto as a transaction medium. In other words, all crypto transactions potentially incur a tax liability – this is not good news for Bitcoin maximalists who foresee the imminent replacement of fiat currencies.
The Ethereum blockchain, however, has repeatedly proven to be a solid foundation for new use cases such as decentralized finance (DeFi) and non-fungible tokens (NFT).
Diversification and prices. The number of cryptocurrencies, coins, tokens and the range of cryptoassets as a whole continues to expand on what appears to be an almost daily basis. Granted, there are a lot of these new iterations of crypto that lack many of the attributes that make the most well-known crypto so attractive to investors, but the market is growing nonetheless. How does this relate to back and forth between Bitcoin and Ether?
The conversation around the growing number of cryptoassets goes far beyond simply acknowledging the ever-growing number of investable options. Going back to the first point, there are a number of applications that run on the Ethereum blockchain; stablecoins, DeFi, NFT are all connected to this non-bitcoin platform. As blockchain and crypto use cases continue to diversify, it makes sense for capital to flow to the platform that supports the plurality, if not the majority, of these new applications.
Platform vs. asset. An additional factor in the competition between bitcoin and ether is what will ultimately be more valued by the market – the ecosystem versus a specific cryptoasset. Going back to more concrete terms, what is the real value of an organization like Apple?
Does it make sense that blockchain and crypto apps play out differently?
There will surely be quite a bit of discussion and debate around what the recent bull run in the ether means for the longer term maturation of the crypto and blockchain space. That said, and aside from the price volatility that continues to exist in the crypto space, there are a few fundamental questions that are starting to move the larger conversation forward. It is far too early to say what prices will ultimately settle for various cryptocurrencies, how new applications will develop, or which options will come to the fore. Either way, the extent of creativity and innovation must be celebrated.