Bitcoin and Ethereum had a difficult 2018/19. Blue Fox Notes translated or wrote some articles related to Bitcoin and Ethereum, and has always been optimistic about the development of both Bitcoin and Ethereum.

It is difficult to tell which is better, because they are taking completely different paths. Bitcoin is the most valuable storage in the digital age. It is the most native digital asset and the most original OG asset in the future digital age, with an irreplaceable consensus position. Ethereum is taking the path of digital asset ecology. Through the exploration of application scenarios such as DeFi, NFT, and games generated by Ethereum, it promotes the encryption field towards large-scale application.

If we simply use the market value theory, which one will be higher in the future? There are two key factors that determine whether the winner will be higher or lower.

Who reaches the singularity moment faster?

Bitcoin is getting closer and closer to its singularity moment. Perhaps in three to five years, its users will reach a certain scale, and it will undergo a mutation and enter a stage of rapid growth. BTC currently relies to a certain extent on the promotion of the outside world, including traditional institutions, to attract large-scale users.

In addition, it is worth noting that since the beginning of this year, some active community forces have emerged based on Bitcoin under the promotion of the Ordinals protocol. Based on Bitcoin, it is possible to germinate and give birth to a second-layer ecosystem that is different from Ethereum L2. If it develops, some unexpected things may be born. This is where Bitcoin may gain points in the future. As for the extent of evolution, it is not clear, but it is worth continuing to pay attention to. If a second-layer ecosystem appears, it will form a partial competitive relationship with Ethereum.

Ethereum's singularity moment depends on the large-scale adoption of DeFi, NFT, web3 games and web3 social networking. However, this singularity moment requires infrastructure support. Currently, L2-based smart contract wallets and Rollup-centric expansion are being built, and it may take three to five years to complete the overall infrastructure construction. Once the infrastructure is built, it will greatly promote the arrival of the singularity moment.

In general, the breakthrough logic of Bitcoin and Ethereum is different. As the overall economic value on the Ethereum network increases, Ethereum, as an underlying asset and security provider, will be forced to continuously increase its market value. Currently, a small portion of tokenized US dollars (nearly 100 billion US dollars) has been tokenized on Ethereum and applied to the DeFi ecosystem. If some of the tokenized US bonds and US stocks are circulated on a larger scale based on Ethereum in the future, the scale of Ethereum DeFi will increase to a considerable extent.

Once Ethereum carries hundreds of thousands or even trillions of dollars of assets, the market value of Ethereum itself will increase accordingly, otherwise it will not be able to provide sufficient underlying security. Of course, it will take a long time to reach this day, and there will be many variables in this process, such as the sudden emergence of some breakthrough technology.

Who created the native stablecoin?

In one case, Bitcoin has a chance to continue to outperform Ethereum, that is, to build its payment network ecosystem and have crypto-native stablecoins in this network. From this perspective, the decisive factor in the battle between Bitcoin and Ethereum lies in the battle of stablecoins.

For the time being, the probability of building on the Ethereum network is higher, which is also an important reason why some people believe that Ethereum will eventually surpass Bitcoin. As for how it will evolve in the future, there is no conclusion yet.

There is also a possibility that, as RWA progresses, it will lead to the tokenization of traditional US dollars and US bonds, squeezing out the early demand for crypto-native stablecoins (after all, people are more likely to understand stablecoins in the fiat world, etc.). In other words, it is possible that in the next 5 to 10 years, the demand for crypto-native stablecoins will be a niche demand. Niche demand will cause the development of crypto-native stablecoins to encounter early bottlenecks. Large-scale breakthroughs may take more than a decade or even decades. If this happens, then native stablecoins will not be the winner in this battle for the Iron Throne in five to ten years. Chains that carry stablecoin assets in the traditional world may gain a first-mover advantage. For this reason alone, Ethereum is slightly more likely to do so than Bitcoin.

Who will eventually ascend to the Iron Throne?

In general, Bitcoin currently has an advantage in terms of crypto-native spiritual power, decentralization, and social consensus, while Ethereum has an advantage in terms of security, flexibility, and ecological prosperity.

When factors such as banking crises and geopolitics occur, the Bitcoin narrative has an opportunity to rise and is expected to achieve a certain breakthrough in the scale of users. However, due to the complexity of management for ordinary users, it needs the help of traditional institutions to achieve large-scale adoption.

If Bitcoin reaches its singularity moment faster than Ethereum in the next five years, then Bitcoin may have a head start on the path to the Iron Throne due to its social consensus power.

If Ethereum completes infrastructure construction (rollup-centric expansion + L2-based smart contract wallet, etc.) in the next three to five years, and Bitcoin does not enter the singularity moment during this period, then Ethereum may accelerate into the singularity moment in 3-5 years, which means it may enter the mass adoption stage faster than Bitcoin.

Once the infrastructure is built, Ethereum's multi-chain or L3 based on L2 will achieve an interactive experience close to traditional web2, which will remove the entry barrier for large-scale users. The exploration of NFT, Defi, web3 games, and web3 social networking will be greatly accelerated. If RWA enters the Ethereum Defi field, it may promote a substantial increase in its TVL and enter a new level of composability exploration.

Bitcoin has a time window of about five years. If it achieves the singularity moment within these five years with the simultaneous promotion of traditional institutions and the community, it will not be easy for Ethereum to catch up.

However, if the singularity moment is not reached within five years, then the security of Ethereum will need to be greatly improved five years later because it carries a large amount of digital assets. In about 10 years, a super underlying chain worth tens of trillions or even hundreds of trillions of dollars may appear.

As of now, it is hard to say which of Bitcoin and Ethereum will eventually take the Iron Throne. Everything depends on the evolution in the next five years. The development of the two in the next five years will basically determine their position as the leaders in the crypto world in the next few decades. Before the two reach their peak, any rise and fall of each other is temporary. Everything is evolving, and no one has a crystal ball. Everyone has their own preferred logical assumptions. Just believe what you believe.

If we have to give a probability, at present, in my personal opinion, Ethereum has a slightly better chance of winning. However, this is just one person's opinion, and this probability will be adjusted over time and will not remain unchanged. Who will win in the next five years will be seen. These five years are the most critical construction stage, and basically we can see the clues of the pattern.