A Two Horse Race: Everything you need to know about the #Flippening
At the time of writing, CoinMarketCap lists over 700 different virtual currencies. The two leading the pack are bitcoin and ether, the native currency to the Ethereum Network. Together these two account for over 80% of the market share, with bitcoin leading the way. However, some think the #flippening may happen sooner than later.
What is the "flippening"?
The flippeninng is the name given to the event when ether (ETH) passes Bitcoin (BTC) in total market cap. This will be a unique milestone that shows the shift in interest in ether over bitcoin. There has even been a hashtag and website created for it.
Earlier this year, bitcoin accounted for up to 90% of the market share. Now, it does'nt even hold half that. As you can see in the photo above, Ethereum has over 4 times the ammount of nodes as Bitcoin. This means that the network is more secure because more nodes validate each block. The mining reward is also higher, even with more nodes. This is because ether is mined every 12 seconds compared to 10 miniutes with bitcoin. Lastly, the 24-hour trade volume has been consistently favoring ether as global trade has ramped up.
What is causing this?
The cause of this potential shift in power can be traced to a couple factors. One being bitcoins scaling dilemma. Currently, the storage space for each transaction is too much for a single block, thus causing long block times and high transaction fees. The community of miners who decide on the fate of bitcoins protocol can't seem to come to an agreement. One solution that has been propsed is a SegWit or segregated witness. This would allow more transactions to fill each block. However, this system has not yet gained the neccesary backing.
Another factor is the wave of ICO's on the Ethereum network. These initial coin offerings allow investors to fund start-ups before they're developed. This gives investors stake in the project in the form as pre-sold tokens. The risk involved in this unregulated system is high. Investors have no recourse if a project fails or you're scammed. However, as we saw with the Ethereum ICO in 2014, the risk can be worth the reward. At one point in the ICO, a single ether was $0.40, now let that sink in.