Crypto News | Will “The Flippening” Boost Ethereum?

In the world of cryptocurrencies, Bitcoin is still top dog. Many people hear of Bitcoin before they even learn what cryptocurrencies are. It has been this way for as long as Bitcoin has been around, but will it be this way forever? In case another cryptocurrency ever does pull ahead of Bitcoin, this event will be known as the Flippening. Obviously, the two most likely candidates at the moment are Bitcoin’s shield bearers, Ethereum and Ripple.

Although new solutions such as SegWit and the Lightning Network have proved effective in solving some of Bitcoin’s scalability issues, Bitcoin is starting to lag behind in some key areas, most notably the number of transactions, mining rewards and the number of nodes. It is precisely Ethereum that has been beating Bitcoin in these areas. Even so, the Flippening is still a long way off, since Ethereum has a lot of scalability issues of its own. While developers have proposed some solutions, such as off-chain transactions (called “sharding”), implementing these solutions may prove more difficult than implementing scalability solutions for Bitcoin. The problems arise due to the fact that Ethereum is not only a cryptocurrency (Ether), but a complicated application ecosystem. While Bitcoin’s popularity is the very thing limiting its growth, since a lot of users means higher fees and longer waiting times, in the same way, it is Ethereum’s application as the backbone of the Internet of Things that prevents it from implementing upgrades as easily and as effectively. Still, many predict that Ethereum could knock Bitcoin off its throne and that the Flippening could actually happen in 2018, as long as it solves some of its problems.

Who knows what the future may bring? Maybe the cryptocurrency of the future is one that has not yet been released? Or maybe it will be a national, centralized cryptocurrency? When it comes to the latter, the Bank for International Settlements (BIS) is very skeptical. According to the banking authority, digital assets issued by central banks carry serious risks for the global financial system, including “higher instability of commercial bank deposit funding”, “a wider presence of central banks in financial systems” and “overall economic losses” when state-owned central banks inevitably prove less efficient than the private sector. Greater political interference in the financial industry is another unwanted consequence.

When it comes to decentralized cryptocurrencies, there have been some good news recently. Primarily, South Korea is planning to reverse its bans on ICOs, although the move is not without its Catch-22. The government will have to be given access to capital inflows, with the option of introducing “a value-added tax, a capital gains tax, or both on trade”, while local crypto exchanges will be expected to pay a corporate tax and register to get a license and be authorized by the government.

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Author: Max Rothstein

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