Cryptocurrencies: Ethereum will challenge Bitcoin's hegemony

at the end of 2021 a new cryptocurrency appeared that seemed to come directly from a science fiction novel. Worldcoin offered everyone who was ready to let their eyeball scan, free digital tokens. More than 100,000 people have registered. The demand indicates that 2022 could be the year in which alternative coins question the supremacy of Bitcoin.

In today's column we make a number of predictions for the coming year.

Bitcoin remains the largest and best known cryptocurrency for the time being. According to Coingecko, it has a market capitalization of $ 887 billion. This is about twice the size of the second largest ether. In the middle of the usual volatility, prices reached new heights in 2021, in the hope of greater acceptance by the mainstream. In April, the Coinbase cryptocurrency exchange was listed in the USA. In October the first stock market-traded Bitcoin fund was launched in the USA. Bitcoin's price jumped over $ 67,500 in November before falling under $ 50,000 again this month.

The uneven price development will continue. The company's interest in alternative currencies is not yet uniform. Tesla explained that holding Bitcoin as an alternative to cash proved its liquidity. Then it sold its participation and decided that Bitcoin could no longer be used to buy its electric vehicles.

The future of all digital tokens still lies with the regulatory authorities. The US stock exchange supervisory authority Securities and Exchange Commission has approved the continuation of a Bitcoin ETFs because it holds futures contracts that are traded on a regulated stock exchange and not directly Bitcoins. The world's largest crypto exchange, Binance, remains unregulated and not listed. It collided with the supervisory authorities in Singapore. China announced in September that crypto transactions were illegal. The head of the SEC, Gary Gensler, warned that investors could be violated without further supervision.

During wax dogs, the institutions that are worried that blockchain and cryptocurrencies could continue to eliminate their expensive services of third -party providers. The governments will continue to promote their own digital currencies managed by the central bank.

Both should arouse more interest in bitcoins rival ether. Ether is used to not buy fungal tokens-now a 15 billion dollar market-and is the heart of decentralized financing. Their technology is not dependent on typical financial intermediaries such as banks.

In 2022, the Ethereum network, in which ether is used, is upgraded and expected to be converted into proof of stake verification. This change requires far less energy than the verification of Bitcoin's proof of work.

The change should appeal to environmentally conscious crypto fans and encourage them to change. The long-term bet to win crypto supporters prefers ether, not Bitcoin.