- Willem said that Bitcoins must start playing in the Ethereum Virtual Machine world, leveraging its high-end functionalities and broad ecosystems.
- Vitalik Buterin built the Ethereum ecosystem to develop and improve Bitcoin’s concept.
- Bitcoin can process 4-6 transactions per second while the Ethereum ecosystems can process 12-25 transactions per second.
To quantify the entire web3 industry, we must account for its numerous applications. What started as a new financial system in the past decade has become a trillion-dollar franchise that can transform the world. Today, many organizations have incorporated blockchain technology for its security, traceability, and decentralized nature. Its revolutionary concepts are practical, and many industries have significantly benefitted from the applications of smart contracts, decentralized networks, and digital ownership. Despite this revolutionary trend, one subject remains a hated debate, and the entire industry has anticipated its outcome since the Golden Age of cryptocurrency, Ethereum vs Bitcoins.
Amongst the entirety of the web3 industry, Ethereum and only Ethereum have managed to maintain their pace with the first Bitcoin. Heated debates have ignited across the years about which is better: the first decentralized ecosystem or the first decentralized financial system. The conclusion of this debate is drawing to a close as analysts suggest that Bitcoin finally requires an Ethereum Virtual Machine to reach its full potential.
Ethereum Ecosystem may finally win.
From the start, Vitalik Buterin stated that he created the Ethereum ecosystem not to contest with Bitcoin but to create a decentralized network that improves it. This has been the motto of the second largest crypto coin as it has strived to create an ecosystem embracing innovation within the web3 industry.
After years of ups and downs, the Ethereum ecosystem may have accomplished this goal. According to Botanix Labs Founder William Schroe, with the steady growth of Bitcoin, the first cryptocurrency may capture a tremendous amount of value from the real world. Unfortunately, to achieve this feat, Bitcoin must rely on the capabilities and functionalities of the Ethereum Virtual Machine.
Initially, most individuals know of the history of the web3 industry. When Bitcoin debuted, many thought of it as a mere hoax, a fraudulent activity waiting to collapse. But their assumptions were for naught as Bitcoin soon became one of the most valuable digital commodities in the network at $65,000.
Unfortunately, since then, the industry has faced numerous turmoils. Crypto hacks, scams, and a congested ecosystem have significantly reduced its value. At the time of writing, Bitcoin was valued at $26,868, a significant drop from its highest value. The prolonged crypto winter and consistent crypto lawsuits have significantly decreased its valuation. Fortunately, not all hope is lost, according to the web3 executive.
Willem said that Bitcoins must start playing in the Ethereum Virtual Machine world, leveraging its high-end functionalities and broad ecosystems. He further clarified that if Bitcoin wishes to become mainstream, it must bridge to the Ethereum ecosystems. Doing this will be the first entry point for many real-world assets moving on-chain. Schroeder said, “Bitcoin is the most technologically secure and truly decentralized protocol [and] the EVM has proven itself to be the application layer for the global financial system.“
The basic schematics of an Ethereum Virtual Machine.[Photo/Cointelegraph]
Bitcoin needs Ethereum
Generally, Bitcoin is the world’s first decentralized peer-to-peer payment system. Bitcoin will always dominate the crypto industry due to its dedication to providing better transaction systems. Unfortunately, this is why Bitcin will always be limited to the crypto industry. Its potential is significantly limited if connected to a broader financial system like security and commodity markets.
Vitalik Buterin built the Ethereum ecosystem to develop and improve Bitcoin’s concept. To achieve this, it has introduced numerous tools, consensus mechanisms, technical policies, and ideologies that have expanded its reach in the real world. Thus, the first step is connecting Bitcoin to Ethereum-based real-world assets, stablecoins, decentralized finance, and NFT via the EVM. As the first cryptocurrency, any change in Bitcoin value will affect every other altcoin. By leveraging this power, the Ethereum ecosystems could provide more ways to apply it. Schroeder said, “That’s enormous value and development waiting to happen. “
Also, Read The Explainer: the Ethereum Merge and What it Means for Crypto Investors.
Botanix Lab aims to connect the Bitcoin and Ethereum ecosystem through its SpiderChain. This proof-of-stake layer two implements EVM to EVM bridges, enabling Bitcoin to interact with the EVM. In addition, its decentralized multi-signature mechanism secures all staked assets and doesn’t require a forked Bitcoin.
Schroe aims to create a single dominating entity within the web3 industry by combining the first decentralized network and financial systems. He further believes that wrapped Bitiin on Ethereum and other EVM-compatible chains presents several issues.He argues this approach is a front to introduce centralization within the web3 industry, promoting censorship and regulatory scrutiny. The primary purpose of digital assets is to forgo traditional laws and present an ecosystem that empowers its users directly.
The recent SEC crypto lawsuits have only clarified the fears of many blockchain developers. An attempt to control a decentralized system only highlights the greed and the fear many governments have.
Ethereum ecosystem struggles to this day.
The Ethereum ecosystem is a haven for most blockchain applications. Its years of trial and error have paid off in different forms. Among its most incredible feats is the introduction of Ethereum 2.0, the first global move from Bitcoin’s POW consensus mechanism.
This move generally flipped the entire industry upside down, highlighting a more eco-friendly approach to crypto mining. Today, the Ethereum ecosystem enables building and deploying smart contracts and decentralized networks. Its improvements have eliminated downtime, fraud, control, or interference from a third party.
The Ethereum Virtual Machine is among the various achievements it has brought to the web industry. Its developers even introduced an entirely new programming language to run their blockchain. Its success and drive to expand the ecosystem are evident, and most new blockchain applications tend to run to Ethereum’s decentralized network for tools, support, and a thriving environment.
The Ethereum ecosystem has four main principles:
- A decentralized network for trading cryptocurrencies on exchanges
- An investment platform for interested artists
- Provides the necessary payment systems accommodating the purchase of goods and services via crypto
- An ecosystem that hosts Ether, the second highest-valued crypto-coin.
One of the first indications of Etheruemsuprasing Bitcoin is its transaction rate. Bitcoin can process 4-6 transactions per second today, while the Ethereum ecosystems can process 12-25. Its sharding concept has redefined the notion of speed on the entire ecosystem. Despite Bitcoin evolving with time and improving its concept, Ethereum has outpaced its efforts repeatedly.
Despite this, we must remember that Ethereum is an ecosystem that builds blockchain applications. Bitcoin, on the other hand, has kept its primary function the same.
Schroe is one of many to highlight the need to merge Bitcoin and Ethereum. Many exchanges have sought after this golden dream of relaxing. It’s the final step web3 requires to start shaping the world’s view of digital assets. For instance, Robin Linus released a white paper on October 9th titled; “BitVM: Compute Anything on Bitcoin.”
This article expressed well-detailed steps on how Ethereum-like optimistic roll-up smart contracts can be made on the Bitcoin Network. However, it indicated the need for a soft-fork Bitcoin version activated by miners. Paul Sztorce, the creator, says it will offer new privacy and scaling use cases to Bitcoin.
However, only a few share this same viewpoint. Cory Klippsten, the CEO of BTC-only exchange Swan Bitcoin, believes driving chains and solutions into Bitcoin’s decentralized nature will infringe on its 14-year-long integrity. Mixing both concepts will generally cause a massive influx of scammers and hackers.
With opinions differing between exchanges, is the merger between Bitcoin and the Ethereum Ecosystem the next best thing?