Ethereum has jumped from around $42 to nearly $49 in the past few hours, rising some 10% after a week or so of relative stability in the $40 range, sending its market cap to nearly $4.5 billion.
There does not seem to be any primary reason for this rise, but a combination of factors. A Japanese exchange has added eth. Huobi’s off-shore futures exchange has also added the currency. There are suggestions OKcoin will too, but the timing is not known.
On top of what seems to be increasing infrastructure for ethereum, the currency might also be benefiting from bitcoin’s current troubles, with its price falling today by around 3.5%, currently standing just below $1,200.
The reason is probably because everyone is getting sick of the scalability debate. There appears to be no real bitcoin news regarding projects. While increasing fees are adding pressure on current bitcoin projects to leave.
Such as OpenBazaar, a decentralized market much lauded when it was conceived years ago and primarily focused on bitcoin. However, that may be changing as Mike Wolf, a lead designer at the project, publicly asked whether OpenBazaar should accept other digital currencies as “bitcoin fees are getting high.”
As one might expect, the overwhelming response was yes, with most of the top ten coins suggested by responders. But, logically, as eth’s transaction volumes are far higher than any other currency’s, except bitcoin’s of course, and as its market cap is magnitudes above, you’d think they’d be first choice in addition to bitcoin.
Another factor may be that bitcoin.com, which has millions of views, has made a public announcement that states “the current “Bitcoin Core + Blockstream” Bitcoin development team… is in fact actively harming the health of the Bitcoin economy by stifling efforts to solve some of Bitcoin’s most pressing problems.” It further continues:
“There are currently cryptocurrencies which perform better than Bitcoin, have more features than Bitcoin, have a more receptive and open development team than Bitcoin, and have a better upgrade path than Bitcoin. The single and only remaining quality that Bitcoin has over these other cryptocurrencies is first-mover advantage and its pre-existing network of users and infrastructure. If these qualities are not preserved, Bitcoin will continue to lose market share to competing cryptocurrencies.”
Any resolution appears unlikely before autumn/winter, if at all. Therefore other currencies, and primarily eth, may continue to attract bitcoin projects which are now clearly looking to hedge or pivot, adding to eth’s infrastructure in the process.
On top, eth continues to work on their own projects and infrastructure, with some launching alphas. Of course, it’s all new stuff, so things should be expected to break, but as we saw last year, they do actually fix them and they fix them very quickly, unlike bitcoin which has still not fixed the capacity problem after two years.
Still, the bitcoin community keeps making new proposals to try and solve the problem, with the latest being extension blocks. It might perhaps gain support – especially after litecoin activates segwit allowing Blockstream to apply their theories there – as no one appears to really care anymore whether it is the right way to go with the public seemingly completely fed up.
If it does succeed, bitcoiners may get back to taunting Western Union and talking about as good as free and as good as instant online payments with double spends extremely rare due to the first-seen mechanism, plus digital gold.
Eth would then get back to focusing significantly on smart-contracts, with the two biggest currencies potentially complementing each other. For now, however, eth clearly sees an opportunity, whether it wants it or not, as the currency currently provides as good as free and as good as instant payments.
Much, therefore, depends on how long bitcoin takes to sort out its problems as, conceptually, there may come a point when few would care what bitcoin does if the currency takes far too long to the point where most holders throw in the towel.
Disclaimer: The views expressed in the article are those of the author and do not represent those of, nor should they be attributed to CCN.com.
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Last modified: June 11, 2020 10:06 AM UTC