Although Bitcoin (BTC) remains the topmost cryptocurrency in terms of trading value, its long-term future may be in jeopardy.
Over the last year, network congestion and skyrocketing fees have alienated businesses that used to have BTC as their payment method of choice. As a result, merchants who used to accept purely BTC were forced to add other cryptocurrencies to their payment options, with some completely dropping BTC altogether. In fact, even the black market on the dark net—one of Bitcoin’s earliest fans, have ditched BTC in favor of more functional cryptocurrencies, like Dash and Litecoin.
Despite finally implementing the Lightning Network, Bitcoin’s legacy chain has lost and continues to lose portions of its market to newer blockchains and cryptocurrencies, which are more than eager to take its place. Lesser known and less popular blockchains have been catching pieces of the market that have fallen out as Bitcoin suffered through its network issues. The term “flippening” was coined as users kept track of how closely other cryptocurrencies come to usurping Bitcoin’s dominance.
Whether the mother of all blockchains will regain and retain its crown is yet to be seen. But one thing for sure is that without usability, its value largely depends on speculation—and can therefore fall as fast as it rose.
Ethereum vs Bitcoin—An Imminent ‘Flippening?’
Both private institutions and government agencies have already awakened to the sweeping change that blockchain brings. Many have started exploring possibilities using the technology that far surpasses the original implementation of the Bitcoin protocol.
Bitcoin does have its obvious limits. And it is this lack of flexibility that had users wanting more, and pushed Ethereum into birth in the first place, with more new blockchains emerging shortly after. Stellar, Ripple, Dash—the list of newer blockchains goes on and will continue to grow longer as private blockchains add even more to the mix.
But with Ethereum currently in the running right next to Bitcoin by market cap, it’s unsurprising that the two are pitted against each other often.
Sometimes referred to as the “world computer,” the Ethereum Virtual Machine (EVM) is poised as the best contender in overthrowing Bitcoin. In one of his talks, Ethereum founder Vitalik Buterin discussed the difference between Bitcoin and Ethereum: Bitcoin is a calculator; Ethereum is a smartphone, he analogized. The Ethereum network and its smart contracts became a monumental feat that gave rise to thousands of blockchain projects and facilitated many businesses in their transition into the space.
In fact, even Bitcoin’s controversial fork, Bitcoin Cash (BCH), which currently runs fourth in terms of market cap, is jumping in on the smart contracts game. This is something probably not in the cards for the legacy chain of Bitcoin in the near future. Yet, the capability to integrate and deploy smart contracts, Bitcoin Cash argues, had always been embedded within Bitcoin’s original protocol before they were deactivated due to a lack of necessity—and comprehension, at the time.
Ethereum’s Community–Wide, Permissionless Collaboration
The blockchain competition continues to heat up—so much so that word wars are spreading on online forums. But at the end of the day, the only thing that really matters is which one makes it to mainstream adoption. And this circles back to the scaling debate.
Fortunately for Ethereum, the EVM allows participation and decisions from their development ecosystem—without having to gain consensus from the entire network. This is because development teams can deploy their own independent projects and do not have to rely on a blockchain protocol upgrade to solve their problems. Ethereum’s open development platform enables smaller independent teams build and deploy their own projects at will.
As heavier dApps (decentralized applications) tested the network’s tenacity and congestion became an issue for Ethereum, creators began launching projects to help facilitate scaling and further bolster mass adoption. Start-ups decided they need not wait for the entire network to come to an agreement and have taken it upon themselves to find immediate solutions to their most pressing problems.
And this community-wide initiative is getting somewhere interesting, with several notable projects rising to the surface. One interesting solution is formulated by a start-up called Dispatch Labs.
The Dispatch protocol tackles the network congestion debacle by offsetting heavy application data to a decentralized network of storage providers so it doesn’t take blockchain space. Much like miners dedicate their processing power to process transactions, the distributed storage providers or “farmers” dedicate their storage space to decentralized application.
This off-chain scaling solution would keep data out of the way, decongesting the network so it remains free to do what it’s supposed to do and process transactions smoothly. Dispatch leverages on-chain smart contracts to ensure that the data that has been segregated from the transaction remain accessible to the applications that need them, whenever they are needed.
Offloading heavy data from the blockchain would come in very handy for data-heavy applications like the CryptoKitties game—which knocked the Ethereum network down last year. Similar data-heavy applications such as those used by businesses can then run on Ethereum without dragging the entire network down. The Dispatch scaling solution can enable the integration of services that handle large media files, as well as digital assets that may be traded online.
Thousands of other smart contract projects like Dispatch are built on Ethereum, with many projects working together to build the new internet of work. At the rate Ethereum is going, compared to that of Bitcoin’s sluggish development pace, it’s hard not to see the possibility that Ethereum can really overthrow the predecessor it was modeled after.Opinions expressed here by Contributors are their own.