Bitcoin vs. Ethereum: Who will reach the singularity faster?

Bitcoin vs. Ethereum: Which reaches singularity first?

During the difficult years of 2018/19 for Bitcoin and Ethereum, Blue Fox Notes translated or wrote some articles related to Bitcoin and Ethereum, and has always been optimistic about the development of Bitcoin and Ethereum.

It is difficult to say which is better, because the two originally went completely different ways. Bitcoin is heading towards the most valuable storage position in the digital age, is the most native digital asset, and is also the most primitive OG asset in the future digital age, with an irreplaceable consensus position. Ethereum is taking the path of the digital asset ecology, exploring the application scenarios of defi, NFT, games and other applications through Ethereum, and promoting the crypto field towards large-scale applications.

If it is simply based on market value, who will be higher in the future? There are two key winning hands in this.

Who will reach the singularity point faster?

Bitcoin is getting closer and closer to its singularity moment. Perhaps in three to five years, its users will reach a certain scale and mutate, entering a stage of rapid improvement. BTC currently depends to some extent on external world promotion, including traditional institutions, to attract large-scale users to enter.

In addition, it is worth noting that this year, under the promotion of the ordinals protocol, some active community forces have emerged based on Bitcoin. Based on Bitcoin, there may be a different second-tier ecology from Ethereum L2. If it develops, some unexpected things may emerge. This is where Bitcoin may score in the future. As for the extent of evolution, it is not clear, but it is worth continuous attention. If a second-tier ecology appears, it will form a partial competitive relationship with Ethereum.

Ethereum’s singularity moment depends on the large-scale adoption of defi, nft, web3 games and web3 social. However, this singularity moment requires infrastructure support. Currently, smart contract wallets based on L2 and scalability based on Rollup are under construction, and it may take three to five years to complete the overall infrastructure construction. Once the infrastructure construction is completed, it will greatly promote the arrival of the singularity moment.

Overall, the breakthrough logic of Bitcoin and Ethereum is different. With the overall increase in economic value on the Ethereum network, it will force Ethereum, as a bottom asset and security provider, to continuously increase its market value. Currently, a small part of tokenized US dollars (about 100 billion US dollars) has been tokenized on Ethereum and applied to the defi ecology. If a larger range of tokenization of US bonds and US stocks in the future is based on Ethereum, the scale of Ethereum defi will be significantly improved.

Once Ethereum carries hundreds of billions or even trillions of dollars in assets, its market value will rise accordingly, otherwise it will not provide sufficient underlying security. Of course, it still requires a long evolution to reach this day, during which there will also be many variables. For example, the sudden emergence of some breakthrough technology.

Who gave birth to the native stablecoin?

In one case, Bitcoin has the opportunity to continue to be stronger than Ethereum, that is, to build its payment network ecosystem and have an encrypted native stablecoin in this network. From this perspective, the victory or defeat of the battle between Bitcoin and Ethereum depends on the stablecoin war.

For the time being, it is more likely to be built on the Ethereum network, which is also an important reason why some people believe that Ethereum will eventually surpass Bitcoin. As for how the future will evolve, there is currently no conclusion.

There is another possibility that with the progress of RWA, will it lead to the tokenization of traditional US dollars and US bond tokens, squeezing the early demand for encrypted native stablecoins (after all, people are more likely to understand the stablecoins in the fiat currency world), that is to say, it is possible that the demand for encrypted native stablecoins will be a niche demand in the next 5 to 10 years. Niche demand may lead to early bottlenecks in the development of encrypted native stablecoins. And large-scale breakthroughs may require more than ten years or even decades. If this happens, then the native stablecoin is not the winner in this Iron Throne dispute in five to ten years. Chains that carry traditional world stablecoin assets may gain first-mover advantages, and only in this respect, Ethereum is slightly higher than Bitcoin.

Who can finally ascend to the Iron Throne?

Overall, in terms of the spirit of crypto-native, decentralization degree, and social consensus, Bitcoin is currently dominant. In terms of security, flexibility, and ecosystem prosperity, Ethereum is dominant.

When there are factors such as bank crises and geopolitics, Bitcoin’s narrative has its chance to rise and is expected to achieve a certain breakthrough in terms of user scale. But due to the complexity of management for ordinary users, it needs to rely on traditional institutions to achieve large-scale adoption.

If Bitcoin enters the singularity faster than Ethereum within the next five years, then Bitcoin may have a leading advantage in moving towards the iron throne due to its social consensus power.

If Ethereum completes its infrastructure construction (centered on rollup-based expansion + L2-based smart contract wallets, etc.) in the next three to five years, and Bitcoin does not enter the singularity in this period, then Ethereum may accelerate into the singularity faster than Bitcoin in 3-5 years, which is possible to enter the stage of large-scale adoption earlier than Bitcoin.

Once the infrastructure construction is completed, Ethereum’s L2 multi-chain or L3 based on traditional web2 interaction experience will remove the threshold for a large number of users to enter. The exploration of NFT, Defi, web3 games, and web3 social aspects will be greatly accelerated. If rwa enters the Ethereum Defi field, it may push its TVL to a substantial increase and enter a new level of composability exploration.

Bitcoin has a window of about five years. If the singularity is achieved in this five-year period with the promotion of traditional institutions and communities, then Ethereum will not be easy to catch up.

However, if the singularity is not reached within five years, then Ethereum, due to carrying a large number of digital assets, will need to greatly improve its security. In about 10 years, there may be a super underlying chain worth trillions or even tens of trillions of dollars.

Currently, it is difficult to conclude which one, Bitcoin or Ethereum, will ultimately reach the iron throne. Everything depends on the evolution of the next five years. The construction of the next five years for both basically determines the position of the leader in the encrypted world for the next few decades. Before both reach their peak, any mutual decline is a temporary phenomenon. Everything is evolving, and no one has a crystal ball. Everyone will have their own logical assumptions. Believe in what you believe.

If you have to say a probability, currently, in my personal opinion, Ethereum has a slightly better chance of winning. However, this is just one person’s opinion, and this probability is constantly adjusted with the change of time and is not fixed. Let’s see who will win after five years. These five years are the most critical construction stage, and the trend can basically be seen.