Will Ether Dethrone Bitcoin and If so, When?

In the crypto world, Bitcoin reigns supreme; it is the crypto with the highest per-token value and market cap, as well as being the most recognizable crypto of them all. This has been the status quo for years and Bitcoin lovers would like to imagine that it will always be the case.

However, Bitcoin might be facing some serious competition if a recent survey, several market movements, and some industry developments are to be believed. And this competition is coming from none other than Ethereum, another heavyweight token within the industry.

This is far from the first time that Ethereum has been positioned as a competitor to Bitcoin. That is because it essentially is. If you look at the current list of cryptos by market cap, you'll see Bitcoin first and Ethereum second, which has been the case for years; Bitcoin at the top and Ether following behind. But currently, there is some speculation that Ether could snatch the top spot from Bitcoin. But why is that?

First, it is worth noting that last year, the Ethereum Foundation completed the switchover from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus. Ethereum has been operating with a PoW for years, as does Bitcoin. The change had been framed as a way to become more environmentally friendly, with the blockchain's energy use falling by over 95%. A major goal for the Ethereum Foundation moving forward also seems to be improving transaction speed. Currently, the blockchain can process about 30 transactions per second, but there are plans to increase this.

There is also the upcoming 'Dencun' upgrade that will see Uniswap users able to create unlimited pools. These moves seem to be not only for the benefit of the environment and the Ethereum community but also a way of securing the token's use in the future. You see, while Bitcoin has been beating out Ethereum for years in terms of token price, Ethereum has one advantage over it which is its use cases.

Bitcoin might be popular but the Ethereum blockchain is clearly being used for a wider variety of purposes. There is the use of the blockchain for the creation of Decentralized Applications (D'Apps), its dominance within the NFT sector, and for the tokenizing of assets. Bitcoin, on the other hand, has far fewer use cases to fall back on, with most of the focus being on its native token.

In fact, a common critique of Bitcoin is its lack of use cases besides being used as a means of payment and a speculative investment asset. And even on those fronts where it does dominate, Ethereum is fast catching up. In terms of being a speculative asset, institutions seem to be increasingly bullish on Ethereum. A recent Fidelity Digital Assets report, for example, shows that the firm considers Ethereum to have a positive trajectory in the long and short term. This sort of outlook indicates that Ethereum will see even more investments for a long time to come.

And in terms of being a means of payment, Ethereum is not falling too far behind. Consumer businesses like Rakuten and Namecheap, along with betting sites like Mega Dice all take Ethereum as a means of payment from customers. And as more market confidence grows in the token, it could end up not being too far off from Bitcoin.

Among crypto buyers, it is certainly the one with the most backing. A recent survey from CryptoVantage, for example, sees that a majority of crypto users have the most faith in Ethereum to dethrone Bitcoin as the top crypto in the world. It is also worth noting that the second most popular option was Dogecoin, with less than half of the votes that Ethereum got.

But should Ethereum be able to overthrow Bitcoin, when would it happen? The answer to that appears to be less about a specific timeframe and more about a few things falling into place. First, the emphasis on speculative trading of cryptos would need to either diminish significantly or demand for Bitcoin as a whole would have to drop.

If there was less industry focus on speculative trading, most of the attention would be paid to the tokens with other use cases. In that situation, Ethereum would probably surpass Bitcoin since it has a leg up in terms of use cases. The other possible situation would be the demand for Bitcoin declining significantly. But the only thing that could cause this would be Bitcoin no longer being safe to use or profitable for investors. And in the next few years or even a decade, this just might be the case.

Take a few years ago when Tesla first announced that it would be accepting Bitcoin as payment for some of its products. The decision was backtracked because of the environmental impact of Bitcoin, which uses more energy than entire countries.

Years later, Bitcoin is still using the energy-intensive proof-of-work system while Ethereum seems to have seen the writing on the wall and has switched over. Over time, mainstream businesses might lean more towards other cryptos like Ether that do not have the stigma of environmental damage and in a decade, it is not impossible that Bitcoin will see little institutional support for this reason.

As of 2023, this is not a very likely scenario but not impossible. The more probable scenario in which Ethereum would overtake Bitcoin would be that Ethereum as a blockchain becomes exponentially more used by mainstream businesses. This success of the blockchain could create a ripple effect that makes Ether a more valuable cryptocurrency.

All in all, the moves that the Ethereum Foundation is making currently show that it plans to remain relevant within the core crypto community and in the mainstream for years to come. Bitcoin might be on top at the moment but might not have that much longevity. And should Bitcoin see a decline in the next few years or even a decade, Ether seems ready and willing to take its place.

(Disclaimer: Devdiscourse's journalists were not involved in the production of this article. The facts and opinions appearing in the article do not reflect the views of Devdiscourse and Devdiscourse does not claim any responsibility for the same.)