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Is Bitcoin killing Ethereum?
Is Bitcoin killing Ethereum?
Bitcoin

Is Bitcoin killing Ethereum?

By Marco Cavicchioli - 3 Feb 2020

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Analyst Juan Villaverde suggested that Bitcoin may be killing Ethereum

The hot spot is smart contracts. As of today, in fact, Ethereum is not only a network natively equipped with smart contracts, but these are also the main reason for its success. 

Bitcoin’s blockchain, on the other hand, does not natively support smart contracts and the primary reason for BTC’s success is probably due to it being considered as digital gold. 

But Villaverde questions this dichotomy, saying that: 

“The king of crypto itself could become a smart contract platform” .

The analyst points out that, while Ethereum is now a platform for running an infinite variety of applications, known as smart contracts or dApp, its network is now congested

The reduced capacity and low speed of the Ethereum network in the execution of transactions would counterbalance an increasing demand for transactions, to the degree that many believe that more scalable alternatives could spread

This alternative would be Bitcoin, according to Villaverde, by means of sidechains like RSK

Relying on the leading blockchain and cryptocurrency in the world, projects like RSK would have all the credentials to become one of the major competitors in the competitive battle between platforms to support smart contracts or dApps. 

Villaverde describes Bitcoin as the main chain for moving or preserving value, while sidechains like RSK would be parallel chains to do everything else. 

In this scenario, Bitcoin’s blockchain remains the same, with its miners continuing to extract BTC, but another chain is added to the first, with its own reference cryptocurrency (RBTC) and its miners. 

RBTC would simply be a form of Bitcoin used for the execution of smart contracts on RSK. This would allow bitcoin owners to run dApps. 

To tell the truth, to date it doesn’t really seem that RSK has managed to undermine Ethereum’s dominance of smart contracts and dApps. In fact, for some time now the number of daily transactions on the Ethereum blockchain has far exceeded those on the Bitcoin blockchain, yet according to the RSK analyst, it is destined to be successful.

In particular, he argues that DeFi’s decentralized finance tools could be among the first to switch to Bitcoin’s sidechain, although in reality DeFi continues to be unquestionably dominated by Ethereum today. 

RSK has a lot in common with Ethereum’s code, so much so that everything currently running on Ethereum could work just as well on Bitcoin. In addition, DeFi dApps currently use mainly ETH as collateral, whereas they might benefit from using BTC for the same purpose instead. 

Villaverde gives the example of DAI, arguing that if it had BTC as collateral instead of ETH it could have a wider spread. 

For these reasons, he suggests that Bitcoin could kill Ethereum and become the main platform for smart contracts and dApps as well, albeit in reality there is no evidence so far that this transition process is taking place. 

Marco Cavicchioli
Marco Cavicchioli

Class 1975, Marco teaches web-technologies and is an online writer specializing in cryptocurrencies. He founded ilBitcoin.news, and his YouTube channel has more than 11 thousand subscribers.

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