It currently looks like Ethereum is about to overtake Bitcoin. This has already happened in some metrics and not yet in others. But is that even the right question? Can you even compare Bitcoin and Ethereum?
It must hurt right now to look at Ethereum as a Bitcoin maximalist. The young smart contract blockchain just seems to trump Bitcoin in everything.
When the longed-for fee market hits Ethereum instead of Bitcoin …
Years ago, the “real” Bitcoiners advertised that Bitcoin needs high fees for long-term survival so that miners can earn money if the block reward dries up. And what happens now? Bitcoin fees are stagnating, mostly at a level that annoys everyday life, but is still far from replacing the reward.
Daily fee income from various blockchains
With Ethereum, however, the fees explode. Bitcoin miners currently earn a maximum of $ 1.5 million a day through fees – and Ethereum miners a good 17 million. Ethereum has not only overtaken Bitcoin in what was once considered the most important discipline, it has left it far behind. Ethereum was the first to achieve the goal formulated by the core developers of sustainably financing a blockchain through fees.
… Ethereum becomes a sidechain instead of liquid
The “real” Bitcoiners have also been preaching for years that Bitcoin should not grow on the mainchain but on a sidechain or off-chain. For this they gave the Lightning network more advanced praise than any technology has ever received since the camshaft, and even accepted that Blockstream, the champion of the Bitcoin maximalists, presented a sidechain with Liquid that, even with the best will in the world, is not decentralized.
And what is the market doing? He packs Bitcoin as a token on Ethereum and makes that the preferred sidechain. There are around 1000 Bitcoin in the Lightning network and around 2.5000 in Liquid. And how many bitcoins move as tokens on Ethereum? Almost 60,000. With WBTC, renBTC, HBTC, sBTCm imBTC and pBTC there are already six providers for these tokens. Once again, Ethereum has not only overtaken Bitcoin, but has dropped it so far that you can no longer talk about the same class.
… and even the Bitcoin maximalists rely on Ethereum
Tokens on Ethereum are so grand that even the creme de la creme of the Bitcoin maximalists, the hardliners and stars at conferences, can’t keep their hands off them. Just recently, WhalePanda, Jameson Lopp from Casa and Samson Mow from Blockstream advertised the INX token for an exchange to be founded. This is amusing because hardly anyone poses so excessively as an Ethereum and token-hating Bitcoin maximalist.
The INX token sounds like a pretty insecure investment. The exchange for security tokens, which has yet to be founded, only allows investors to participate in the earnings when it reaches a positive cash flow. And until then it must first cut at least seven million dollars in negative cash flow and prevail against established companies in a highly competitive and difficult regulatory environment.
In all likelihood, the exchange that issues a security token on Ethereum will be made redundant by the DeFis on Ethereum itself. But Lopp and Mow shouldn’t care – they have already sold their shares at a profit.
Apart from the fact that the token is by no means as good an investment as is said – why does it run on Ethereum of all places? Why not on Liquid? If Blockstream’s CSO Samson Mow isn’t using their product, who will? And if even a magazine founded by maximalists like BTCTimes advertises an ERC token – not just once, but two and three times – isn’t the game over long ago?
Have only the most deluded and screwed up Bitcoiners not yet realized that they have clearly lost to Ethereum?
The best sidechain ever
There are many more reasons why a Bitcoin maximalist clenched his teeth before falling asleep in those months before he thought of Ethereum – if he didn’t happily count himself asleep by how many Satoshis he made today by his Packed bitcoins as Ethereum tokens in a DeFi smart contract.
And that brings us to the one, the elementary statement: It’s all a matter of consideration. Ethereum and Bitcoin may not be comparable at all. Bitcoin is a currency that sits on a blockchain, while Ethereum is a blockchain that requires the currency ether to pay for gas.
Bitcoin claims to be hard, tight money. Bitcoin should be safe to store, process solid, large transactions, and guarantee an acceptable to a very good level of privacy. Bitcoin fulfills this requirement. Ethereum, on the other hand, is a unicorn: a magical blockchain on which an entire ecosystem of tokens and smart contracts romps that do lots of crazy things. It is okay that you need ether for this, but the coins are more of a means to an end.
For many at the core of the Ethereum scene, the opposition never existed. Vitalik Buterin and most of the other Ethereum founders continue to hold Bitcoins and freely admit it without fear of being lynched by Ethereum maximalists. There are certainly Ethereum maximalists. However, these do not mean that ether will become the currency for everything – but that the Ethereum blockchain will eat everything.
The fact that more and more Bitcoins land on the Ethereum blockchain should actually please both Ethereum and Bitcoin maximalists: The Ethereum maximalists see that Ethereum is the best blockchain, while the Bitcoiners recognize that Bitcoin is also the best on another blockchain Money is.
Win win?
Beyond the blinkers
Many Bitcoin maximalists, however, have become too deeply involved in mirror-fencing to see that. They use every opportunity to pull up on Ethereum – the difficulty of running a node and verifying the money supply, the reliance on Infura, the scene’s love for unicorn t-shirts, bugs in smart contracts, Ponzi games in tokens, the complexity of ETH2, the high fees and so on.
There is always something to be found if you want to badmouth Ethereum, whether it makes sense or not. The poor maximalists already suspect that the next success of Ethereum will not belong in coming and that it will shake them all the more. Until they console themselves with another disadvantage, and so on.
Other Bitcoin maximalists still find ether pointless as a currency, but learn to appreciate Ethereum as a sidechain. They never understood why as a Bitcoin maximalist you suddenly have to find a centralized sidechain like Liquid cool just because it’s made by the champions of blockstreams. They are happy to be able to bring their Bitcoins to the open blockchain Ethereum through several providers.
Anyone who tries it once will quickly find out that Ethereum is the best sidechain that Bitcoin can have. While you can only push bitcoins from exchange to exchange with liquid, with WBTC or RenBTC and so on you suddenly get access to the full world of smart contracts: You can use the bitcoins as collateral to borrow dollars, you can use the bitcoins loaned to get interested, they can be exchanged for all kinds of tokens in decentralized markets, and so on.
A Bitcoin on Ethereum combines the best of both worlds: The hardness of the Bitcoin currency – and the magic of the Ethereum blockchain. For a Bitcoin maximalist, there can be nothing better. Most of them still have to understand that.
