News hardware Flippening: Can Ethereum outperform Bitcoin in the next few months?
Since 2015, a cryptocurrency by the name of Ethereum has risen to the top 2 in the ranking of crypto market capitalizations, just behind Bitcoin. As The Merge approaches, many are wondering about Ethereum’s ability to overtake Bitcoin in the near future.
The Flippening: Ethereum ahead of Bitcoin
The day when the first cryptocurrency will be dethroned is called flippening. Taken from “flip” in English, the expression regularly used in the cryptosphere designates the moment when Ethereum will reverse Bitcoin. In the same way as in the traditional stock market, the ecosystem of cryptocurrencies is subject to a ranking.
Split into two categories: Bitcoin and Altcoins (alternative cryptocurrencies to Bitcoin), virtual currencies are ranked according to their market capitalization or market cap in English. Precisely, this data highlights the total monetary sum invested in a cryptocurrency. To determine the importance of a crypto compared to another, we can perform a simple calculation:
- 19,121,962.00 BTC x €23,597.68 = 451.23 billion
- (Circulating Crypto Supply x Price = Market Cap)
Thus, we know that Bitcoin currently represents 451 billion euros in market capitalization, almost twice as much as the market cap of Ethereum, increased to 226 billion. Therefore, there is still a long way for Ethereum to catch up with Bitcoin, judged as digital gold.
The merge boost event for Ethereum
For some time, Ethereum enthusiasts have been getting impatient with the idea of The Merge update. The second largest cryptocurrency has finally announced the schedule for the launch of the long-awaited update… With the arrival of The merge for mid-September, the cryptocurrency should attract new investors allowing to inflate prices.
This update will move the Ethereum blockchain from proof-of-work (PoW) to proof-of-stake (PoS). In other words, this development should make Ethereum more environmentally friendly since it will no longer require graphics cards, and therefore electricity, to be mined. Along with proof of stake, mining could also make Ethereum even more attractive. If it is necessary to have a large quantity of ethereum to mine, we imagine that some could switch to buying, a phenomenon favorable to the growth of the price of ether.
However, not sure if this is enough to overtake Bitcoin. Indeed, the event will not necessarily make people happy, like the Ethereum miners of the first hour who risk leaving for Bitcoin or other cryptocurrencies…
Whether it will ever happen is unclear, but flipping is an eternal debate between maximalist Bitcoin and pro Ethereum. On the one hand, Bitcoin aficionados believe that it cannot be dethroned since the currency has become a safe haven compared to other cryptocurrencies.
Indeed, Bitcoin is at the origin of the entire cryptocurrency ecosystem. As a result, it reigns supreme there since several new cryptocurrencies are referenced on Bitcoin through an exchange pair. Thus, to buy recently issued virtual currencies, it is sometimes necessary to have BTC.
Additionally, Bitcoin carries distinct values and ideological principles from Ethereum. By advocating a totally decentralized system, Bitcoin convinced several libertarian followers in search of independence in their transactions on the Internet.
On the other side, Ethereum does not carry the same ideas. Unlike Bitcoin, the cryptocurrency is not so decentralized since its CEO is known to everyone: Vitalik Buterin. Nevertheless, its decentralized autonomous organization system still allows a global consensus in decision-making. Due to its progressive aspects, Ethereum has become an ever-evolving network, offering multiple possibilities to ether holders. For example, ERC-20 smart contracts are the origin of virtual certificates, more commonly known as NFT (non-fungible token).
This plurality of opinions marks a long-term debate. For the moment, the odds are going in favor of Bitcoin with regard to its capitalization, only nothing is decided for the years to come… One thing is certain, in the event of a reversal of the first cryptocurrency, the entire sector would find itself upset since Bitcoin currently constitutes almost 50% of the total capitalization of cryptocurrencies.