Ethereum is perceived as better than Bitcoin because it can run smart contracts. The inconvenient truth for Ethereum fans is that you can also run smart contracts on the Bitcoin blockchain and the innovation in this space looks vibrant with projects such as Sphinx on the Lightning Network and Stacks (fka Blockstack).
There are also many blockchain platforms positioning as competition to Ethereum, such as:
As with all blockchains, the winning formula is attracting developers and entrepreneurs to build applications that create network effects on top of the platform. Bitcoin and Ethereum have huge advantages because network effects attract more developers than cool features do (however brilliant & cool & important those features are).
There are two scenarios for how this might play out:
- Scenario 1: A Blockchain Layer 1 platform that beats Ethereum and Bitcoin (perhaps using uses Proof Of Stake or better scalability or easier application development).
- Scenario 2: Layer 2 platforms on top of Blockchain Layer 1 platforms and apps and middleware built on top of Layer 2 platforms (such as Sphinx). BTC may end up serving as a collateral within smart contract platforms. I am inclined to Scenario 2, because of network effects.
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