3 Reasons Ethereum Could Outpace Bitcoin In 2022
To declare that cryptocurrency is the way of the future is to argue a case that has already been decided. It is widely recognized that the globe is gradually moving away from traditional legal money and toward cryptocurrencies as a general medium of trade and payment. Cryptocurrencies have been dubbed one of the best-performing asset classes this year, with various cryptocurrencies witnessing rapid growth, with bitcoin remaining the most popular, with a market worth of about $900 billion. Bitcoin is a secure, easy-to-use, and widely accepted digital currency. Voyager Digital’s CEO, Steve Ehrlich, says “Bitcoin is a digital currency that serves as a store of value and is limited in supply. While it is still volatile, it is one of the most stable cryptocurrencies, has the longest history, and has been the most steady and best performing financial asset year after year over the previous ten years “,
Ethereum, on the other hand, has been rapidly gaining traction and closing the gap on its larger rival. Ethereum has a market valuation of little over $450 billion, making it the second most popular cryptocurrency. Its price has risen by roughly 466 percent this year, compared to around 70 percent for Bitcoin. Adelman asserts that “Infrastructure is what Ethereum is all about. It’s a new blockchain that can transform banking and technology “,
Ethereum appears to be a competitive alternative to bitcoin, with predictions that it will outperform bitcoin by 2022. One of the main reasons is that ethereum will require less energy. Bitcoin’s environmental impact is currently one of the most significant roadblocks. To validate transactions, Bitcoin employs a proof of work (PoW) mining mechanism, which requires powerful computers to solve complicated problems. Many policymakers and skeptics are concerned about Bitcoin’s long-term environmental impact. Ethereum is currently migrating from a Proof of Work to a Proof of Stake approach. Proof-of-stake systems are significantly less harmful to the environment. Users stake a piece of their crypto assets to validate transactions, so they don’t require nearly as much energy. It will require around 99.95 percent less energy once it fully moves to a Proof of Stake mechanism, potentially giving it a significant advantage over Bitcoin.
Another benefit of Ethereum is that transactions will be faster. Bitcoin is one of the slowest cryptocurrencies, executing transactions at a rate of about 7 per second. Ethereum is now running at a modest rate of 15 to 45 transactions per second. That amount will, however, rise after Ethereum’s upgrade is released next year. Vitalik Buterin, one of Ethereum’s inventors, claims that the network could handle 100,000 transactions per second with the new Ethereum transition. These faster transaction speeds may aid Ethereum’s scaling and offer it a higher chance of adoption through https://blockchaineventon.com
More importantly, ethereum’s decentralized applications allow it to expand. It is no longer news that Ethereum not only allows for the operation of its native token, ether but also allows for the operation of decentralized applications. Decentralized finance (Defi) and a non-fungible token( NFT Marketplace) are two of the most widely used applications. Decentralized finance, or Defi, is an uptrend facilitator for Ethereum. Traditional financial intermediaries such as stockbrokers and trading platforms are omitted from the equation. Developers can also create new projects on the blockchain because it is an open-source network. As a result, Ethereum’s potential is virtually unbounded. Because all of these decentralized apps require Ether, Ethereum will benefit if any of them become popular, even if Ether does not become a conventional medium of exchange. As a result, there is greater activity surrounding Ethereum because its value is limited only by the innovation of the world’s coders.
Finally, the decision between Bitcoin and Ethereum as investments boils down to the risk tolerance of the investor. As the world gets more digital and cryptocurrency’s popularity grows, both have positive drivers in the foreseeable future. Nobody can predict the future of Bitcoin, Ethereum, or cryptocurrencies in general. While Ethereum isn’t for everyone, it does have a few key benefits over Bitcoin that might make it a compelling investment option in 2022.
