What do the differences between ether and bitcoin mean for the future development of blockchain and crypto applications?
ether and the Ethereum blockchain have rapidly moved up in terms of crypto valuation and the other applications that are developed on this blockchain. Taking a step back, and setting aside the price watching that captivates market analysts and participants every single day, ether and Ethereum have really been the leading story during the back half of 2020 and 2021.
The current rally in ether prices aside, many of blockchain applications that have seized mass market attention and focus have been developed, and run on, the Ethereum blockchain.
While bitcoin has continuously (and deservedly) continued to lead the wider crypto conversation, there is a case to be made that – in terms of applications and use cases – that ether and Ethereum are going to lead the next stage of blockchain implementation. In other words, it is starting to look like there will be – for the first time in financial markets conversation – an open competition to determine which protocols and cryptocurrencies are going to lead the sector forward. Let’s break down what some of the fundamental items are that the market will have to assess moving forward.
Applications versus transactions. One of the most heated debates over the last several years is the back and forth about whether or not crypto can actually be used for transactions, versus simply being held as a speculative investment. The Ethereum blockchain, however, has proven time and again to be a solid foundation for new use cases such as decentralized finance (DeFi), and non-fungible tokens (NFTs).
Diversification and prices. The number of cryptocurrencies, coins, tokens, and the array of cryptoassets at large continues to expand on what seems like an almost daily basis. Granted there are many of these new iteration of crypto that lack many of the attributes that make the more commonly known crypto so interesting to investors, but the market is expanding all the same.
Linking back to the first point there are any number of applications that run on the Ethereum blockchain; stablecoins, DeFi, NFTs are all connected to this non-bitcoin platform. As blockchain and crypto use cases continue to diversify, it does make sense that capital will flow to the platform that supports the plurality, if not majority, of these new applications.
Platform versus asset. An additional factor in the competition between bitcoin and ether is what will ultimately be more valued by the marketplace – the ecosystem versus a specific cryptoasset.
It is far too early to say what prices will finally settle at for various crypto, how new applications will develop, or which options will move to the forefront. Regardless, the breadth of creativity and innovation should be celebrated.