Bitcoin is the pioneer cryptocurrency and has continually dominated the industry. According to CoinGecko, bitcoin accounts for 42% of the total cryptocurrency market capitalization while ethereum dominance is at 18%. But this scenario could change soon. 

Ethereum is the second leading cryptocurrency. However, the cryptocurrency is according to some crypto experts expected to surpass bitcoin and become the dominant cryptocurrency. Ethereum overtaking bitcoin is not a stealthy idea and is often referred to as flippening. But why is ethereum set to become the dominant cryptocurrency? 

Ethereum Growing Value  

Bitcoin, being the cryptocurrency pioneer, had the first-mover advantage. Its name was synonymous with the whole blockchain and crypto industry. Despite the increases in its unit price, it has shed significant market share. The digital currency market capitalization was more than 85% during the 2017 bull run which is almost twice the current value. 

To give you a clear picture, bitcoin is what Yahoo was to the internet world. Despite recording more than three times competitors’ traffic, its uniqueness dwindled as other companies started offering similar products. Ultimately, yahoo was overtaken as the dominant search engine.

With a market cap of $375 billion, ethereum is less than half of bitcoins total value of $870 billion. However, Ethereum has grown seismically by more than 1000% in the last 12 months, far more than bitcoin’s 300% growth. Currently, ethereum is trading at $2400 and has cemented its place as the second-largest biggest cryptocurrency. While all these numbers look very good for Ethereum, there are also of course Ethereum price forecasts that expect for ETH to actually drop in value in the near future.

Why Ethereum Will Become the Biggest Cryptocurrency

While there is much work required to catch up with bitcoin, Goldman Sachs analysts believe ethereum could establish itself as the leading virtual currency. Guggenheim Partners co-founder Todd Morley, says Ethereum is “where the action is.” 

Here is why ethereum could overtake bitcoin as the leading cryptocurrency. 

1. More Utility

Although both bitcoin and ethereum are decentralized open-source cryptocurrencies, ethereum utility makes it distinct. Bitcoin blockchain ledge can only record transactions. 

Ethereum blockchain, on the other hand, supports smart contracts and decentralized apps. In other words, any person can create an app on the ethereum network.  Moreover, the ethereum blockchain is used to make non-fungible tokens (NFTs). NFTs are used to digitalize collectibles and arts.  

In 2020, the NFT increased to $250 million representing a 299% growth. People can exchange the NFTs over the network using Iniswap and similar services. With the popularity of NFTs going mainstream, we can only expect more growth in the future.  

2. Using the Network is Faster

Besides its utility, ethereum boasts more speed than bitcoin, which has boosted its adoption. For example, while bitcoin takes about 10 minutes to validate blocks, ethereum network block validation takes 12 seconds. 

3. Ethereum is Scheduled for Massive Upgrades 

Ethreum has had its issues. Hore, the developers are working to address this weakness which could boost the adoption of the cryptocurrency and reduce transaction costs. Two upgrades are slated to happen soon.

A Shift from PoW to PoS

The first upgrade will push the cryptocurrency from proof of work to proof of stake. Essentially, cryptocurrencies like bitcoin use proof of work to validate transactions.  Ethereum is moving to proof of stake, which is more eco-friendly. 

Essentially, proof of work requires the miners to prove they have done computational work to validate transition and mine new tokens. On the other hand, proof of stake transaction and block validation is done by tokens held by an individual. 

This method involves less energy and computational power hence is environmentally friendly. In addition, it is very safe. An individual will need to hold over 51% of the tokens to malicious alter the blockchain network. With ethereum being the most active cryptocurrency network, getting this colossal amount of tokens is almost impossible.

Sharding

Sharding is basically subdividing tasks among nodes. In other words, several nodes will be working on subtasks within the same task. The goal is to make the ethereum network faster and more efficient. It will also reduce the transaction fees significantly. 

What's more, the ethereum upgrade will involve moving into greener proof of stake from the initial proof of work. These features will appeal more to Gen Z investors and could contribute to the increase of ethereum adoption.

Final words

Ethereum is set to overtake bitcoin. However, this does not mean the pioneer cryptocurrency will die. On the contrary, it will most likely continue acting as a hedge against inflation. Ethereum, on the other hand, has more utility for smart contracts and dApps. In addition, with the new upgrades, it will be faster, effective. This could see the value increase and the market capitalization eventually overtake bitcoin as the leading cryptocurrency.