Ethereum Gaining Market Share from its Big Brother
Investors bets on Ethereum lower Bitcoin’s share of dominance below the 50% level of overall market share
Active purchases of Ethereum by investors, led to a decrease in the share of Bitcoin dominance below the 50% level. The last time the capitalization of BTC fell so low was back in December 2017, when the ICO token boom raised the share of ETH to 18.2%.
Now the share of Ethereum in the capitalization of cryptocurrencies is 15%, thanks to the growth of the altcoin rate against the background of the fall of Bitcoin’s dominance.
ETH has reached historical highs, rising above the level of $2733. Analysts attribute this record to an increase in the gas limit in the blocks to 15 million Gwei.
This is of course the most efficient and effective way to solve the Ethereum scaling problems that have plagued the blockchain from the second half of 2020 to the present, which has led to an abnormal increase in fees and a clogged mempool of transactions.
In the summer of 2020, developers lost the ability to increase the gas limit, which determines the computing power of the network allocated for the assembly of blocks. The recent Berlin hard fork, which we have discussed in one of our previous blogs, allowed them to exceed this ceiling.
In the future, the blocks may expand to 20 million Gwei, and in the third quarter, the network code will change the principles of calculating the commission. The real solution to scaling problems will occur after the transition of Ethereum to version 2.0, the zero phase of which was launched in November 2020.
Bitcoin on the other hand does not boast similar solutions to scaling in the short and long term. The last time the developers expanded the capacity of the blocks was in 2016, but the controversy about their radical increase several times led to the split of the network on the forks of Bitcoin Cash. Later, for the same reason, a fork of Bitcoin SV appeared.
Therefore, the sharp increase in fees on the Bitcoin network caught investors by surprise. Now these fees are three times the cost of transactions on the Ethereum blockchain, although most of the time these figures were roughly comparable.
The commission anomaly is explained by the power outage to the miners of Xinjiang. Its submission was resumed, but the Bitcoin hashrate is still at a low level. China imposes strict controls on coal-fired power plants, planning to reduce the number of their consumers that avail of power from them. Miners will be the first victim of China’s climate initiatives, which plan to abandon fossil fuels by 2060.