A comparative look into the crypto verse: Is Ethereum the future of cryptocurrency?

A comparative look into the crypto verse: Is Ethereum the future of cryptocurrency?

Hello everyone. Today, I want to talk to you about Ethereum, and why it may very well be the future of cryptocurrency.

Now, I know it’s a very big claim to come here today and pretend to know which cryptocurrencies may or may not appreciate in value in the near future. But hear me out. I’m going to present the evidence to you, and you decide by yourself. However, I think that there’s a strong case to be made here in favor of Ethereum, and let me tell you why.

Recently, I came across a study published Monday the 16th of August of this year by the State of Crypto in Singapore. Which is a privately-owned cryptocurrency marketplace that allows users to send, receive or store about 42 cryptocurrencies. Including Bitcoin and Ether.

The study was a survey of more than 4,348 Singapore-based adults ages 18 to 65. And it was about finding out what is the percentage of cryptocurrency holders, as well as which cryptocurrencies people were holding.

The results are interesting to say the least. 2,862 of the people surveyed were current crypto holders and 1,486 respondents were non-crypto holders. 78% of the persons who had crypto owned Ether, and only 69% of them held BTC.

So, people actually prefer holding on to Ethereum rather than Bitcoin. And they might be right, or should I say wise.

But, why? You would say. Why is this the case? Isn’t Bitcoin a more established cryptocurrency? Why aren’t people preferring Bitcoin to Ethereum?

First of all, the Ethereum Blockchain is more versatile.

Ethereum is a technology based on the coordinated efforts of a whole community. Which is, in turn, powering its native cryptocurrency, Ether (ETH) and thousands of other decentralized applications. The tech is new and ever-evolving. And this, in fact, gives it a huge advantage over the competition.

There are two types of accounts on Ethereum: user accounts and contracts. Which are programs that run on the Ethereum Blockchain. Both types have an Ether balance, may send Ether to any account, may call any public function of a contract or create a new contract, and are identified on the blockchain by their address.

Ethereum is also the host and the foundation of many other applications and tokens that have a widespread utility. This is very important. Because it protects Ethereum from the risk of stagnating. It makes the community stronger in the way that it will allow it to always have something new to bring to the table. To be useful.

For the second point, let’s talk about energy consumption.

Have you ever considered how much energy do cryptocurrencies require to generate? The answer to that question might not surprise you if you already have an idea about it, since it’s making a lot of fuss lately. But if not, then you’re in for a shock.

The Bitcoin Energy Consumption Index that provides the latest estimate of the total energy consumption of the Bitcoin network indicates that the annualized carbon footprint of Bitcoin is at 70.35 Mt of CO2. Just to put that into perspective, it’s comparable to the carbon footprint of Greece.

Now let that number sink in and let’s see how Ethereum will do. The Ethereum Energy Consumption Index shows us that the annualized Ethereum carbon footprint is at 29.89 Mt of CO2. That’s 57% less of what the Bitcoin network requires.

On top of that, there’s also Ethereum 2.0 that was launched on the 1st of December 2020. It promises to deliver more for 99% less energy than the current technology.

Finally, Ethereum is cheaper and less volatile than Bitcoin.

The price of Bitcoin is now over 46,000 USD. And while Bitcoin may have had humble beginnings, it has now skyrocketed, plateaued and stabilized around a relatively high price.

After consulting the Average True Range, which is an indicator that tells us how much the price has moved over a certain period, we find out that the Bitcoin price has moved, on average over the last 14 months, in the range of 12,068 USD.

So, this puts Bitcoin at a very high price, and you should be prepared to endure price movements that can go up to 12,000 USD on average, if you’re planning to own it.

Compared to that, Ethereum’s price sits now at around 3,190 USD. Which represents only 7% of price of Bitcoin. This makes it a relatively affordable price and cuts down the risk of incurring a huge loss by a lot.

Adding to that, if we look at the Average True Range again to gauge the volatility of Ether, we find out that it’s only about 679 USD, at its peak. Again, a very tamed volatility in a very affordable range.

So, this is why I think that Ethereum has a real chance at staying in the game for a long time. It has a huge potential of making it in the market as well as in other areas. And it’s shown that it’s appreciating in value as the world slowly transitions to transacting more and more via cryptocurrencies. Which makes it a stable opportunity for investments.

But at the end, it’s just what I think. I wanted to present to you this subject for debate and not as financial advice. Perhaps it will give you some insights on how you should orient your research and then decide what you want to invest into.

Also, it is crucial to not limit your research by only being interested in the fundamentals. Technical analysis is the backbone of every successful cryptocurrency trading strategy.

Author bio:
I have been a trader since 2015. My trading strategy allowed me to transition to a better lifestyle. But it didn't come easy. There was a lot of work, research and learning opportunities along the way. Thankfully, I came through.
I am also a copywriter and SEO specialist. I have created blogs, product descriptions and webpages in collaboration with clients and online brands all over the world.
Finally, I might add that I have a passion for teaching as I've been a professor of finance since 2012.
You can visit me on my website obsessivecryptocurrencydisorder.blogspot.com.

Publication date: 
09/11/2021 - 19:45
Disclaimer

The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.