At this point, no one can say for sure whether Ethereum (ETH) as a cryptocurrency will surpass Bitcoin (BTC) in terms of price valuations, but tickers and prospects around the former cryptocurrency and its underlying network shows the coin will not remain an underdog forever.
Messari analyst Ryan Watkins has underscored the possibility of the Ethereum Network becoming more secured than the Bitcoin Network, per the scheduled plan to roll out the former’s Proof-of-Stake (PoS) Network. The PoS model is a massive shift from the Proof-of-Work (PoW) model upon which both cryptocurrencies are currently operating.
The security outlined here is based on the susceptibility of both models to manipulation and attack. While the PoW model is considered vulnerable to a 51% attack in which a few miners can control the system, such schemes by any validator in the PoS system may result in the loss of the attacker’s entire asset, making such malicious actions unattractive. As Bitcoin is retaining the PoW model, Ethereum’s shift to a PoS model may give it a safety edge over time.
“The selling point of Bitcoin over Ethereum as a store of value asset boils down its monetary policy being very predictable and the Bitcoin blockchain being very secure,” Watkins said, speaking on a YouTube show Fintech Today, he added, “I think that with the shift to Eth2 and to proof-of-stake, [...] Ethereum may actually potentially be more secure than Bitcoin.”
Amongst the latest public companies stacking up Bitcoin is the Chinese software company Meitu Inc. After two successive bouts of Bitcoin and Ethereum purchases now totaling $90 million, the firm has proven its preference for Ether, having stacked more of the asset in number and monetary terms than Bitcoin.
Perhaps Meitu shares the school of thought that Ethereum is on its way to outpacing Bitcoin in the future, this is a bet that is at wide variance with other public companies making their foray into the world of cryptocurrency investments.
As popularly reported, the Ethereum network is billed to undergo a protocol upgrade dubbed EIP 1559, a highly anticipated upgrade that will see some Ethereum get burnt whenever it is used for transactions. Automatically, deflation will be introduced into the Ethereum network, balancing it out with Bitcoin’s whose maximum supply is known beforehand.
This deflation is sure to impact the price of Ethereum over time. By how much is undefined and unpredictable at the moment, but a factor of scarcity and potential price hike may tilt corporate investors into the second-largest cryptocurrency today.
Ethereum is a highly sought-after blockchain for building decentralized finance applications and smart contracts today. The PoS evolution will also aid the scalability needed to accommodate more of these DApps and with the high gas fee billed to be addressed by the EIP 1559 upgrade, Ethereum’s future plans to outpace Bitcoin per valuation has received the necessary boosts.