Since their founding, Ethereum and Bitcoin have created a buzz throughout the world. Bitcoin, which was created during a time of economic crisis, wanted to revolutionize the financial system and give individuals more control over their finances. Soon after, Ethereum was launched and it introduced smart contracts to the world. However, there are major differences between these two cryptocurrencies.
Differences between ETH and BTC
When ETH was created, about 67% of its coins were pre-mined and the rest were left as mining rewards. This is not the case for BTC. When BTC was created, none of its coins were pre-mined. Besides that, none of its coins was pre-mined. In fact, BTC started at $0 and there was no assurance that it would ever succeed. It’s also worth noting that Satoshi Nakamoto has never sold any of his 70,000 BTC, even when the price picked at $20,000 in 2017. It is quite clear there are many differences in how these coins were distributed.
They Cannot Be Killed
The Coinbase ex-CTO does not believe this to be the case. He recently tweeted on the issue in response to a tweet, which claimed that BTC and ETH could only be killed by a novel innovation that did not entail ITOs or proof of work. In his opinion, the only fair distribution model at this point would be using a national ID system or something similar.
ETH and BTC Are Difficult To Kill
One of the reasons why BTC and ETH are so strong is because they had first-mover advantage. For instance, while other blockchains support the use of smart contracts, Ethereum is still a leader in the smart contracts industry; millions of users all around the world currently use it. Besides that, it has one of the most active developer communities in the crypto sector. Projects such as Tron and EOS have been unable to make a dent when compared to Ethereum.
First Mover Advantage
It’s important to understand that first mover advantage is lucrative, but also poses many threats. Many companies / technologies that had first mover advantage have slowly drifted away. According to a study, “followers” have tended to capitalize on first movers and win in the long run. According to a study, 50% of first movers have failed. In addition, only 11% have gone on to dominate the market share.
Bitcoin’s main advantage is that it was the first cryptocurrency. As a result, it has a huge following and many developers working to improve the framework. Additionally, it’s supported by almost all crypto-related platforms. Most projects working to integrate crypto into the mainstream economy have built their projects around BTC. This is even though there are other cryptocurrencies, which offer better features in terms of privacy, speed, and other aspects. Projects building around Bitcoin makes the first mover advantage very interesting. One could argue that previous first movers did not operate under this framework, where literally the whole industry was depending on it’s foundation…
Having considered factors such as name recognition and active projects, it’s safe to assume that killing BTC and Ethereum will be difficult. Many projects have been initiated with the sole aim of replacing BTC at the top. However, all of them have fallen short of their goal. If the last decade is anything to go by, BTC and Ethereum will continue to dominate the crypto industry. However, there is still an opportunity for many other cryptocurrencies to make their mark in this nascent industry.
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