Bitcoin has risen nearly 1,000% over the past 12 months – a rally that erupted out of the most valuable cryptocurrency ethereum.
The price of bitcoin has gone up from less than $ 10,000 at this time last year to around $ 60,000 per bitcoin while ethereum has added 1,200%, rising from just over $ 100 per bitcoin. ether tokens to nearly $ 2,000.
However, despite the recent success of bitcoin, some fear that central bank digital currencies (CBDCs) could be “kryptonite” for bitcoin and similar cryptocurrencies – while ethereum apps and updates help to stay on.
Bitcoin and ethereum, the two most valuable crytocurrencies, have both risen higher over the latter … [+]
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“Bitcoin is the most talked about cryptocurrency but ethereum has more features, including being more flexible,” Bank of America analysts wrote in a report this week , with the title Bitcoin’s dirty little secrets.
“Bitcoin is also tied to a risk asset, it is not linked to inflation, and it remains extremely volatile, making it inconvenient as a source of wealth or a payment instrument,” the researchers wrote, adding that there’s “a good reason to have bitcoin if you don’t see prices going up.”
The report went on to call CBDCs “kryptonite for crypto” but said that the rise of decentralized finance (DeFi) – designed to replace banks’ blockchain-based protocols – some built on top of an ethereum blockchain – “interesting. ”
The European Central Bank (ECB) is currently debating whether to create a digital euro while U.S. Federal Reserve Chairman Jerome Powell has said 2021 will be an important year in communication to the public about the future of digital dollars.
DeFi is “potentially more confused than bitcoin,” according to Bank of America analysts, who found DeFi ‘s growth “demonstrates the strength of ethereum; its computing capability is critical to DeFi’ s applications.”
With many of the largest DeFi projects built on top of the ethereum blockchain, users over the past year have pushed up the price of ethereum as users flood the network.
Meanwhile, Ryan Watkins, an analyst at cryptocurrency research firm Messari, said this week that he believes ethereum could overtake bitcoin – if not in price then in network security.
The price of ethereum has risen more than 1,200% over the past year, surpassing even bitcoin among its … [+]
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“I think the move to ethereum 2.0 and proof-of-concept is [means] ethereum may actually be more secure than bitcoin, “Watkins said in an interview with Fintech Today.
Bitcoin’s work-proofing algorithm, which requires so-called miners to solve complex computers to unlock new bitcoin and make the network secure, has been criticized as too much energy. Some believe that authentication-participation algorithms, which allow cryptocurrency holders to help secure a blockchain, could improve this but it is not yet known whether a authentication authentication algorithm is sufficient.
As part of a move to ethereum 2.0 that began late last year, an update in July will see some ether tokens destroyed (or “burned”), with users charging the network itself instead the miners who maintain the network.
“The way in which ethereum is going to be money is not really about being taken over by countries as a frontier currency; the way it is going to be money is really about building its own economy,” “Watkins said, noting that DeFi ‘s role is growing.