Soon after the Ethereum blockchain was released in 2015, its native currency ether instantly drew comparisons with Bitcoin, the world’s largest cryptocurrency by market capitalization. Many said or hoped it would end Bitcoin’s reign at the top. However, Bitcoin raced ahead by a dominating margin following support from billionaire tech entrepreneurs and also benefited from being six years older than Ethereum. Still, Ethereum backers did not lose hope and continued to push for it on different platforms.
The coming upgrade of the Ethereum blockchain has renewed that push. A step towards Ethereum 2.0, the Altair upgrade to Beacon Chain on Wednesday is a key move in the direction of a much greener and faster version of the current system. But can it make Ethereum, an open-source, decentralised network that has opened up possibilities of smart contracts, surge past Bitcoin? That’s a long catch.
On Wednesday, Bitcoin was trading around $58,959 (roughly Rs. 44 lakhs), while Ether was trading a little above $4,000 (roughly Rs. 3 lakhs). Since October 1, however, Ether has gained about $1,000 (roughly Rs. 75,035) and Bitcoin has lost $4,000 in the past 12 hours, according to CoinMarketcap.
The Altair upgrade is likely to push the coin further up, rapidly. But it’s not clear whether the push will be sustainable or enough to get it closer to Bitcoin, unless there is a dramatic decline in Bitcoin’s value. All eyes are now set on Ether’s trajectory and whether it can match Bitcoin next year.
Ethereum 2.0 will be an entirely proof-of-stake (PoS) network, a complete transformation from the current proof-of-work (PoW) network. Simply put, PoW makes all miners direct their energy to validate high-paying transactions, resulting in wastage of resources and increased power consumption, which is the case with Bitcoin. PoS method allows the system to randomly pick the transaction for validation, thereby reducing congestion and speeding up the process.
The Altair upgrade is the first major update to the Ethereum network since the London hard fork in August this year. The hard fork mainly brought in EIP-1559, which put the ether on a deflationary path.