Bitcoin and Ethereum can coexist

While some of the most active members of the Bitcoin (BTC) and Ethereum (ETH) community are constantly arguing about the advantages and disadvantages of these two most popular cryptocurrencies, both networks support blockchain for the Bitcoin 2021 conference.

And decentralized finance (DeFi) could play a role here.

Bitcoin and Ethereum can coexist

The conference, held earlier this month in Miami, USA, turned out to be a huge event with thousands of attendees as well as a number of prominent speakers both inside and outside the Cryptosphere.

One of the questions discussed between some industry insiders and Cryptonews was the chaotic dynamics of Bitcoin-Ethereum.

According to conference participants, BTC and ETH are not necessarily connected to one another, as some believe, but exist side by side.

They “compare ETH and BTC directly, like comparing apples to oranges,” said Zeeshan Feroz, chief growth officer at crypto payment company MoonPay.

According to Matthew Gundrum, Marketing Director of crypto payroll service Bitwage, “People don’t realize that ETH and BTC are trying to do two different things and therefore can coexist.”

Both networks have seen “significant adoption” so far in 2021 which, despite occasional problems throughout the process, “will show no signs of slowing down over the next decade,” he said.

Meanwhile, William Zielke, Marketing Manager at crypto payment service provider BitPay, said that BTC remains the most popular cryptocurrency with a share of almost 72%, which is used by consumers for purchases, but ETH has grown to almost 10%.

“Both have a strong belief that digital assets are fast, secure and modern. And both work very well as payment options, ”says Zielke, noting that“ both unfortunately have high fees at peak times ”.

Additionally, Bitcoin has certainly attracted more institutional interest later this year, while interest in ETH is also growing.

For example, MicroStrategy has accepted BTC as its primary treasury reserve because “Bitcoin’s technical characteristics make it an ideal, diversified corporate custodian,” said David Shafrir, co-founder, founder and chairman of GDA Capital, the capital markets arm of the GDA group of firms.

“In the medium term, I think that BTC will continue to grow as a treasury asset and consolidate its position as the most widely used cryptocurrency. On the other hand, I think that ETH will prosper in the medium term. The use cases for ETH will continue to grow, driven by the single person NFT market, ”added Feroz.

Bitcoin and Ethereum can coexist – Role of DeFi

“Lately, institutional investors have been increasingly drawn to Ethereum, mainly to participate in DeFi applications such as yield farming. Currently, several institutional whale wallets dominate the source capital of many of these platforms, ”Shafrir said.

DeFi uses smart contracts that automatically execute code on blockchains, mostly Ethereum. As individual wallet metrics continue to improve, coins continue to enter the DeFi market from funds, trading firms, and centralized profit platforms, “which provide the bulk of the liquidity.”

New applications are constantly being built on top of Ethereum, which means that traditional financial markets “are becoming much more nuanced in their understanding of the potential of cryptocurrency as an asset class,” said Shafrir, adding that one only needs to look at the number of bridges built to Ethereum from other blockchain platforms like Corda.

Speaking of bridges, DeFi could be one of them. However, some wonder how important BTC will be in DeFi.

According to William Zielke, the rapidly growing DeFi space is “effectively bringing bitcoin into the Ethereum network,” providing blockchain traders with a bridge to Ethereum while maintaining exposure to BTC.

“As such, this combination poses a strong threat to traditional banking and financial services. We believe that decentralized financial services are the future,” said Zielke.

David Shafrir said Bitcoin was the original DeFi application, but “the DeFi sector – as propagated by the Ethereum network – currently has very little use for BTC” because BTC cannot be used directly on Ethereum, but rather in an ERC- 20 must be converted or “packaged” token.

To do this, bitcoins are first tied to a third-party smart contract. While users can use their BTC to generate passive income, packaged Bitcoin bridges can pose several elements of risk to their own capital, including theft. With the protocol that provides the wrapper, “it somehow defeats the point of DeFi,” added Shafrir. “In the long run, DeFi will completely transform the structure of the financial system. It is questionable whether Bitcoin plays a major role in this. “

All of these assets, says Matthew Gundrum, have the power to decentralize money and applications.

He added, “In this way, humanity can work together to create a better world without stifling central control.

In addition, according to Zeeshan Feroz, we should look at the “Outside Opportunity”, which platform will dominate, “because on the whole it is not really important”.

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