Bitcoin vs. Ethereum's Battle for the Iron Throne: Who Will Reach the Singularity Sooner?

Original Author: Blue Fox Notes

In the difficult 2018/19 of Bitcoin and Ethereum, Blue Fox Notes translated or wrote some articles related to Bitcoin and Ethereum, and has been optimistic about the development of Bitcoin and Ethereum at the same time.

It is difficult to distinguish between the two, because the two originally took completely different paths. Bitcoin is the most valuable storage position in the digital age. It is the most original digital asset and the most original OG asset in the future digital age. It has an irreplaceable consensus position. Ethereum is following the path of digital asset ecology. Through the exploration of application scenarios such as defi, nft, and games generated by Ethereum, it will promote the path of large-scale application in the encryption field.

In terms of simple market capitalization, who will be the higher one in the future? There are two key winners and losers here.

1. Who reached the singularity moment faster?

Bitcoin is getting closer and closer to its singularity moment. Maybe three to five years later, its users will reach a certain scale, and then undergo a sudden change, entering a stage of rapid improvement. BTC currently relies to a certain extent on the promotion of the outside world, including traditional institutions, in order to attract large-scale users.

In addition, it is worth noting that this year, driven by the ordinals protocol, some active community forces have emerged based on Bitcoin. Based on Bitcoin, it is possible to sprout and give birth to a second-layer ecology different from Ethereum L2. If it develops, there may be some unexpected things born. This is where Bitcoin may add points in the future. As for how far it has evolved, it is still unclear, but it is worth continuing to pay attention to. If there is a second-tier ecology, it will form a partial competitive relationship with Ethereum.

Ethereum's singularity moment relies on mass adoption of defi, nft, web3 games, and web3 social. But this singularity moment requires infrastructure support. Currently, the L2-based smart contract wallet and Rollup-based expansion are under construction, and it may take three to five years to complete the overall infrastructure construction. Once the infrastructure is built, it will greatly promote the arrival of the moment of singularity.

Generally speaking, the breakthrough logic of Bitcoin and Ethereum is different. With the overall increase in the economic value of the Ethereum network, Ethereum, which is the underlying asset and security provider, will be forced to continuously increase its market value. At present, a small part of tokenized dollars (nearly 100 billion U.S. dollars) has been tokenized on Ethereum and applied to the DeFi ecosystem. If in the future part of the tokenization of U.S. debt and U.S. stocks is based on Ethereum for wider circulation, the scale of Ethereum defi will increase to a considerable extent.

Once Ethereum carries hundreds of thousands or even trillions of dollars of assets, the market value of Ethereum itself will increase accordingly, otherwise it will not be able to provide sufficient underlying security. Of course, it will take a long time to evolve to reach this day, and there will be many variables in this process. For example, a breakthrough technology suddenly appeared.

2. Who was the native stablecoin born in?

In one case, Bitcoin has the opportunity to continue to be stronger than Ethereum, which is to build its payment network ecology and have encrypted native stable coins in this network. From this perspective, the winner of the battle between Bitcoin and Ethereum Tianwangshan lies in the battle of stable coins.

For the time being, the probability of building on the Ethereum network is higher, which is also an important reason why some people think that Ethereum will eventually surpass Bitcoin. As for how it will evolve in the future, there is no conclusion yet.

There is also a possibility, with the progress of RWA, will it lead to the tokenization of traditional U.S. dollars and U.S. debt, squeezing the early demand for encrypted native stablecoins (after all, it is easier for people to understand stablecoins in the legal currency world, etc.), that is It is possible that in the last 5 to 10 years, the demand for encrypted native stablecoins will be a niche demand. Niche demand will lead to early bottlenecks in the development of encrypted native stablecoins. And large-scale breakthroughs may take more than ten years or even decades. If this happens, then the native stablecoin will not be the winner in this battle for the Iron Throne in five to ten years. The chain that carries the assets of the stablecoins in the traditional world may gain a first-mover advantage. For this alone, the probability of Ethereum is slightly higher than that of Bitcoin.

Who will end up on the Iron Throne?

In general, in terms of the original spiritual power of encryption, the degree of decentralization, and social consensus, Bitcoin currently has the upper hand. In terms of security, flexibility, and ecological prosperity, Ethereum has the upper hand.

When there are factors such as banking crisis and geopolitics, Bitcoin narrative has its opportunity to rise, and it is expected to achieve a certain breakthrough in user scale. However, due to the complexity of management for common use, traditional institutions are needed to achieve mass adoption.

If within the next five years, Bitcoin enters the Singularity faster than Ethereum, then Bitcoin may have a head start on the way to the Iron Throne due to its social consensus strength.

If in the next three to five years, Ethereum completes infrastructure construction (complete rollup-centered expansion + L2-based smart contract wallet, etc.), and Bitcoin does not enter the singularity moment during this period, then Ethereum will be in 3-5 It is possible to accelerate into the moment of singularity in the next year, that is, it is possible to enter the mass adoption stage faster than Bitcoin.

Once the infrastructure construction is completed, Ethereum is based on L2 multi-chain or L3 to achieve an interactive experience close to the traditional web2, which will remove the barriers to entry for large-scale users. The exploration of NFT, Defi, web3 games, and web3 social aspects will be greatly accelerated. If rwa enters the Ethereum defi field, it may promote a substantial increase in its TVL and enter a new level of composability exploration.

Bitcoin has a time window of about five years. If within these five years, with the simultaneous promotion of traditional institutions and communities, the singularity moment is realized, then it will not be easy for Ethereum to catch up.

However, if the singularity moment is not reached within five years, the security of Ethereum needs to be greatly improved because it carries a large number of digital assets five years later. The super underlying chain of more than ten trillion US dollars.

As far as the current situation is concerned, whether Bitcoin or Ethereum can finally go to the Iron Throne, I dare not make a conclusion. Everything depends on how it evolves over the next five years. The construction of the two in the next five years basically determines the position of the leader in the encryption world in the next few decades. Any mutual ups and downs are temporary until the two peak. Everything is evolving and no one has a crystal ball. Everyone will have their own preferred logical assumptions. Just believe what you believe.

If you have to talk about a probability, at present, only my personal opinion, Ethereum has a slightly better probability of winning. However, this is just a family opinion, and this probability is constantly adjusted over time, and it will not be fixed. Let's see who can win in the next five years. These five years are the most critical construction stage, and we can basically see the clues of the pattern.