If you are a cryptocurrency investor asking the question ‘Bitcoin or Ethereum?’, you may be asking the wrong question, according to ‘Bitcoin Man’ Herbert Sim.
Albert Einstein famously said “When I have one week to solve a seemingly impossible problem, I spend six days defining the problem. Then, the solution becomes obvious.”
Most people are quick to start looking for answers, without realizing that they might be asking the wrong questions in the first place. A common question we all ask throughout our lives is ‘Should I do A or B’ but this may be a false dichotomy as it implies that A and B are mutually exclusive and you can only choose one or the other, or that these two are the only two available choices making us miss out the possibility that there may be a third choice C.
Any cryptocurrency investor doing a research session on the web will almost always quickly turn up the two leading names: Bitcoin and Ethereum. If one takes this as the obvious dichotomy A and B, and digs further, then there is a ton of articles on this topic: Bitcoin is a digital currency at heart while Ethereum’s goal is to build a platform on which other currencies or tokens can be issued. The founding philosophies are different. The investment outlook is different and the risk appetite of individual investor also affects the choice between the two, Bitcoin is the de facto name synonymous with cryptocurrency and has paved the way with proof of concept while Ethereum the platform builder and newcomer seemingly has a greater potential due to its diverse applications (a prime example being Decentralised Finance or DeFi in short).
After exhaustive research and due diligence, one may become more knowledgeable about the crypto market and tech terms, but may actually at the same time be further from answering the question which prompted the research in the first place. Too much information can be confusing.
Although my nickname is Bitcoin Man, I started asking the question: at this stage of development in the industry, is it really between Bitcoin and Ethereum or any new cryptocurrency for that matter? Could I be missing something?
The last 50 years of human history had been especially filled with examples of how new technology or innovation completely changed entire industries, countries and even our way of lives. Digital cameras completely changed and almost wiped out the camera film industry, and then got itself threatened by its own integration into modern mobile phones. Speaking of mobile phones, Nokia the giant which held over 40% of global mobile market as recently as 2007 got sidelined when it did not pick up quickly enough on the smartphone trend which rode on the back of exploding connectivity infrastructure globally.
Sometimes it is a whole new technological leap, sometimes it is a new concept made possible by the level of technology attained. Bitcoin itself is a scarce, digital, decentralized currency backed by block chains technology and then Ethereum came along and further led the way in becoming more than just a currency concept; Ethereum is a platform on top of which applications can be built and many cryptocurrency tokens are actually issued over the Ethereum network.
Many people might not be familiar with the story of the development of cashless transaction in China. Alibaba was the leader with Alipay for online purchases, and then Tencent came along and capture a big audience by first starting out as a daily communication app Wechat before introducing its cashless transfer feature. Reading about this somehow triggered a big inspiration in me, in that a leapfrogging does not always require a big technological leap.
Then I was doing a Bitcoin transfer and it hit me that cost of transfer was very high, and that maybe the choice was not between A) Bitcoin or B) Ethereum, maybe there was a C) third path to tread.
Bitcoin miners are the special pieces of hardware that confirm and secure transactions on the bitcoin network, and they need to be incentivized. On the other hand, on Ethereum, all network transactions incur a fee called Gas. Gas fees are simply payments made by users to compensate for the computing energy required to process and validate transactions on the Ethereum blockchain.
To generalize, all cryptocurrency transactions incur cost and this cost has been hitting new heights over the years.
I started talking to expert friends and associates in the industry, about the possibility of reducing gas fee or, dare I dream it, a Zero gas fee environment. After an exciting journey, I found my third option: