ETH 2.0 VS BTC Who will dominate the next decade?

If nothing unexpected happens, we will see a historic moment in the circle next month.

The merger of ETH2.0, ETH officially switched to POS.

Why switch to POS and some problems after the switch have been discussed in the previous article "Ethereum will merge as early as August or September: big good news? Staking crashes the market? What about Layer2?"

From the user experience point of view, this is unprecedented, comparable to a major surgery where an airplane is replaced while it is in flight. The impact on you is - no impact at all!

Yes, there is no impact. After all, there will be no change in TPS and Gas fee after this upgrade. Even if the legendary L2 becomes cheaper, we have to wait for EIP4488 to reduce the cost of Call Data by 5 times, which is estimated to be next year. There is also the more powerful Proto-Danksharding that will further reduce the cost of L2. Just like what Vitalik said, $0.02, it will be at least the year after next.

So why do we still say this is a historic moment?

Because the long-standing debate between POW and POS, between useless and useful, can finally have a real fight!

In the future, BTC will continue to use POW, while ETH will transform to POS. BTC will continue to follow its golden path, while ETH will completely become on-chain oil. In the next decade, the two major blockchain representative projects will tell us which theory is correct.

POW VS POS (referring only to Bitcoin's POW and Ethereum's POS)

• Who is safer?

This has been debated for many years, and there is still no conclusion.

POW supporters say that we have externalities, real physical mining machines, consuming a lot of energy, blah blah. This externality brings ecological complexity, making a more complex ecology more robust.

The POS side is asking which one can better resist a 51% attack? Although Bitcoin is safe enough now, and 51% of the computing power is almost an astronomical figure, after ETH POS, it is more difficult to get 51% of ETH than 51% of the computing power, so from this perspective, POS is safer.

• Who is more decentralized and more resistant to censorship?

This is also a topic that has been debated for years. The recent crackdown on Tornado by the SEC has brought the topic of anti-censorship and regulation to the forefront.

POW supporters say that we are obviously more decentralized. As long as you have a mining machine, you can mine anywhere. The threshold for a mining machine is obviously cheaper than 32 ETH.

POS supporters said that you don’t even look at the concentration of your mining pool, and you still have the nerve to say that you are decentralized... Of course, now we find that there are basically only a few large "POS mining pools" such as Lido, Binance, and Coinbase on POS. They are actually the same. No one should say that the other side has achieved "real decentralization". As long as our currency holdings are dispersed enough in theory and the mechanism is non-accessible, we believe that both sides are "decentralized".

The fight against censorship is also fierce. POW said, "Don't you see how many people who use POS chains don't use IDCs? IDCs can be closed at any time? More than 60% of ETH 2.0's verification nodes are within the OFAC strike radius. V God seems to be stubborn and says that we will slash any node that is censored. More than half of the nodes are there. When the time comes, no one can say who will slash. (Slash in Chinese: cut/chop/hack)

POS also fought back. POS needs an IDC room, but POW doesn't need a mining farm? Isn't it easier for the government to close a mining farm than an IDC room? Even if many nodes are within the OFAC radius, if they are really censored, we can change the entrusted nodes. It is more convenient to re-pledge and re-entrust the operation coins than to run away with a bunch of mining machines and move positions! You are setting up a factory and setting up a point. It is difficult to run away even if you want to. Our POS is hot money. At worst, we can just shoot and move to another place.

So in my opinion, it's still a half-and-half situation...

Useless Use VS Useful Use

This has always been a soul-searching question for BTC - what can BTC do?

They all say it is digital gold. At least gold has an industrial use, and at the very least it can be used to make gold jewelry. BTC can’t really do anything except transfer it around. Last year it could buy a Tesla, but this year it’s gone. Some people say that lightning network and micropayments have been around for many years, but there has been no progress, and very few people are actually using it.

As a result, people outside the circle think that Bitcoin is useless . People like Munger directly and publicly declare that Bitcoin is a bad apple.

For insiders, it is useless to look at Bitcoin, because there is no ecosystem on it, neither Defi nor NFT ... Various latest technological achievements are emerging on Ethereum, while Bitcoin will not change much in the next few years... It can even be said that after a hundred years, when Bitcoin's block rewards disappear completely, no one knows what will be used to maintain Bitcoin's computing power and security... TX on the chain has begun to show a downward trend in the past two years. Fewer and fewer people are using BTC wallets and native networks directly, but more and more people are using WBTC.

On the other hand, although Ethereum’s vision of becoming a world computer has been shelved, its reputation as a world settlement layer and digital oil has been realized. Its technology is constantly iterating, its ecosystem is constantly expanding, and various types of gas are burned very vigorously every day. If it successfully merges next month, it may even move towards a deflationary path in the future.

Is deflation really going to happen? Doesn’t this sound like it will take away the job of Bitcoin SOV - the store of value? !

This is why some people call ETH Ultra Sound Money - the ultimate currency.

However, BTC doesn’t think so. They have an ultimate killer weapon - the uselessness of uselessness!

Sorry, it’s awesome because it’s useless!

Why? Because there is no competitor! !

As the founder of blockchain, BTC can be regarded as a totem. It has no competitors and cannot have any competitors. Its uselessness is its biggest moat.

On the other hand, ETH is the pioneer of smart contracts, the leader of public chains, and has various functions... but! As long as you are useful, you are not a totem, but a product. The market will always try to make products more useful than you . The story of Ethereum killers has never stopped. The earliest ones were NEO and EOS, which failed... Later, Solana, Avax, and Near are currently chasing and blocking. It can be seen that there are new generation killers such as Aptos and Sui ahead...

Most of these killers are doomed to fail, but! What if one of them succeeds one day? ! After all, it is theoretically possible to achieve better technology and a stronger ecosystem than Ethereum, but it is impossible to have a second blockchain totem. There is only one, BTC.

summary

So is it the useless use that lasts longer, or the useful use that is more intense?

I think the answer will be revealed in the next 10 years.