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This year has definitely not been the best year for cryptocurrency and certainly not the easiest year for Coinbase. At the beginning of 2022, his second largest centralized exchange in the world had to ban more than 30.000 of his wallets somehow connected to Russian accounts. What began as a noble attempt to combat money laundering and circumvent the economic sanctions imposed on Russia by the Western world has yielded somewhat different results.
To make matters worse, a few days ago Coinbase was hit with another class action lawsuit following an SEC allegation. SEC head Henry Gensler said in the past year and a half that he has been staging the company for all users who have purchased Coinbase securities. The SEC is notoriously meticulous when it comes to getting rid of cryptocurrency companies, and as of this writing things don’t look very good for Coinbase.
Against the backdrop of this news, one can’t help but wonder if this is an existential threat facing the cryptocurrency industry. This is especially evident when considering the fact that Terra, his third largest crypto asset by market cap, was reduced to atoms in a matter of days. Join us in this editorial to see if the same fate awaits Ethereum and Bitcoin.
Is this the end of Bitcoin?
It’s tempting to paint the current situation as frightening and hopeless, but as usual, nothing is decided when it comes to cryptocurrencies. Bitcoin’s value proposition isn’t perfect, as it’s more like the Bible or the Holy Grail. The elegance behind its design is why people like Jack Dorsey believe Bitcoin (BTC) is the only viable future for cryptocurrencies.
The Twitter founder had an almost spiritual role in leading the cryptocurrency flock known as the Bitcoin Maximalists. The central premise behind their argument is very simple. Bitcoin’s unique design is the only one safe and efficient enough to transition from the traditional financial world to virtual currency. Indeed, Bitcoin’s network use cases are somewhat limited compared to his traditional DeFi.
For example, a new project, Youniverze Finance, provides a cross-chain platform to engage in numerous DeFi activities. This is something Bitcoin cannot assume, purely by default. Despite its limitations, Bitcoin has a bright future. Recent Taproot upgrades allow multiple transactions to be processed faster than ever, and the first cryptocurrency ever created remains the best.
Will Ethereum Decline Under Pressure?
Similar to Coinbase, the past eight months have not been very kind to Ethereum (ETH) and its community. It all started when the London Fork, also known as EIP1599, arrived last summer. What was supposed to be a game changer for Bitcoin’s direct successor didn’t become the original goal. The plan was to reduce the number of his ETH in circulation by burning excess amounts.
This was done to reduce the ridiculously high gas prices and make them more predictable. .
In some ways, Ethereum is the opposite of Bitcoin. Its network design and smart her contract capabilities allow users to build virtually anything on top of it. This brings significant benefits and drawbacks at the same time, as the inherent complexity of the system makes it more susceptible to external attacks and security breaches.
Nonetheless, Ethereum devotees don’t seem too worried about it and are hoping another upgrade, ‘merge’, will set Ethereum in the stratosphere. It has the potential to be an important moment for
The smart contract potential of Ethereum, enhanced by EIP1599, will finally be fused with the Proof of Stake (PoS) system to maximize its potential. The DeFi and GameFi worlds are already massively built on top of the Ethereum blockchain, and the “merge” will only cement this trend.
Unless a planet-shattering meteor hits Earth or World War III collapses, it’s safe to assume that Bitcoin and Ethereum aren’t going anywhere anytime soon. Both cryptos have certain weaknesses that need to be addressed and resolved in the future, but the value proposition behind these projects is sound.
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