What Is the Flippening?
Ethereum launched six years after Bitcoin’s white paper but quickly gained traction, thanks to its ability to support decentralized finance (DeFi) projects, gaming, NFT creation, and token issuance. The Flippening nearly happened in June 2017 when Ethereum’s market cap climbed to 84% of Bitcoin’s, with only a $7.16 billion difference. Today, Ethereum’s market cap is less than half of Bitcoin’s. Over the years, the gap has grown, now exceeding $170 billion.
The likelihood of the Flippening depends on the price and supply of both cryptocurrencies. If Ethereum sees a significant increase in demand, its price could rise, boosting its market cap relative to Bitcoin. Conversely, a sharp decline in Bitcoin’s price could also edge Ethereum closer to achieving the Flippening, especially since Bitcoin’s circulating supply grows at a slower pace.
Could Ethereum’s Merge Trigger the Flippening?
The Ethereum Merge, completed in 2022, marked a monumental shift in crypto history as Ethereum transitioned from proof of work to proof of stake. This change made Ethereum a less energy-intensive blockchain.
Environmental sustainability has been a growing concern for corporations and public figures, fueling speculation that the Merge could propel Ethereum to the forefront. Although Ethereum initially struggled after the Merge, the cryptocurrency stabilized in subsequent weeks. Despite its significance, the Merge did not lead to widespread adoption or usage growth for Ethereum. It is evident that this event alone cannot trigger the Flippening.
Why Bitcoin Will Likely Retain Its Dominance
Although Ethereum has unique strengths, it is unlikely to overtake Bitcoin as the leading cryptocurrency. One of the primary reasons is the increased centralization of Ethereum, particularly after its shift to proof of stake. Unlike Bitcoin, which depends on a global network of miners, Ethereum uses validators to process transactions. A significant share of ETH securing the network is concentrated among a few entities, such as Lido Finance and Kraken. This centralization makes Ethereum more vulnerable to regulation by governments and private institutions.
Bitcoin, on the other hand, remains the most decentralized cryptocurrency, fostering trust within its ecosystem. It is backed by over 15,000 globally distributed nodes, making successful attacks virtually impossible. Additionally, Bitcoin is immune to control by external parties, further reinforcing its decentralized nature. The identity of its creator, Satoshi Nakamoto, remains unknown, underscoring the community-driven philosophy behind Bitcoin.
Another factor solidifying Bitcoin’s position is its capped supply of 21 million coins, with the last coin expected to be mined in 2040. This fixed supply provides assurance to holders, reducing the likelihood of deflation. By contrast, Ethereum has no supply limit, and its circulating coins now exceed 120 million.
Заключителни мисли
The Flippening remains a hot topic within crypto circles, describing a scenario where Ethereum surpasses Bitcoin as the dominant cryptocurrency. Many experts deem this event highly improbable due to Bitcoin’s significant advantages, including its unparalleled decentralization and finite supply. These qualities make Bitcoin resistant to censorship and regulatory intervention, securing its leading position in the crypto world.
Editor’s note: The opinions expressed in this article are those of the author and do not necessarily reflect the views of Criptochipy.com.
