The non-fungible token (NFT) ecosystem has witnessed the arrival of numerous participants, leading to an overly saturated market where only some projects can take the world by surprise. However, regardless of how the forthcoming additions may seem, the heated battle has always been between the two significant hitters, Ethereum and Bitcoin, or the largest cryptocurrencies by market capitalization and trading volumes. They are the trendsetters that pushed vigilant investors to learn how to buy crypto and smoothed the path for aspiring to-be investors to explore an unknown but promising market. While the latter is known for its decentralized, secure nature, the former has quickly risen to fame due to its capabilities to help developers build decentralized applications (dApps) and smart contracts. Both major-league cryptocurrencies have explored the NFT ecosystem within their means, even if it’s the Ethereum blockchain where the first NFT, CryptoPunks, was created. The project was only made possible through the Ethereum blockchain technology two years after the decentralized ledger’s launch, and ever since numerous developers have taken inspiration and built on the foundation given.
In the realm of NFTs, all eyes are on Bitcoin and Ethereum, the main competitors for supremacy. This clash continuously drives the forces of innovation in digital ownership within the system, yet there can’t be two winners at the end of the contest. Let’s see why NFTs still matters, as well as what the two adversaries bring to the table and which has more potential of coming on top.
Why are NFTs still having value?
To understand why the NFT wave is far from taming, it’s important to understand what these assets have brought to the world. Dissected, an NFT represents a mere data unit on top of a digital ledger, which is often the blockchain. Each NFT ensures that it is unique and irreplaceable through cryptographic tools that attest to the asset’s genuineness, contrasting both cryptocurrencies and physical money, which are fungible, meaning they can always be traded for one another.
To grasp the value of the NFT, you can take the example of an owned satoshis or piece of Bitcoin. You can swap this for another and cash out on it, but the same principle doesn’t apply to NFTs. In a world with entirely fungible assets or commodities, the existence of some that are one-of-a-kind is particularly beneficial, especially in industries like digital art or fashion, where the ability to prove the authenticity and provenance of an item is vital. However, NFTs mainly remain associated with the gaming and arts sectors, revolutionizing these industries and continuing to nurture innovation and evolvement within the systems. Thereby, it’s rushed to tell that the NFTs’ importance will soon fade.
In the foreseeable future, these assets are set to maintain their value and exhibit remarkable price resilience, acting as a catalyst for the birth of new NFTs, particularly those emerging on the leading NFT creation platform, Ethereum. This secures its place as the leading NFT ledger, having a competitive advantage over Bitcoin that’s unlikely to attain the same recognition. The Bitcoin ordinal NFTs that imitate Ethereum’s were launched at the beginning of the year by developer Casey Roadarmor, meaning that they’re still in the exploration phase.
Ethereum secured its spot as the most essential player in the NFT space
The heavy hitter Ethereum is known for hosting numerous use cases, among which the NFTs are some of the most important. However, if you’ve just broken into the NFT space, noting that your options don’t come down to it is essential to facilitate your exploration. But until some experience is gained, let’s see what catapulted Ethereum to the top of the list of the heaviest NFT-friendly blockchains in this space:
- Stability: Ethereum is one of the oldest blockchains and native cryptocurrencies, having been around for almost a decade. Innovation and evolution are unstoppable, which are only some of the factors that weigh a lot in its renown as one of the best-rooted blockchains to date;
- Popularity: Ethereum is among the first things to pop into one’s mind when hearing about NFTs. Regardless of the arguments brought, it’s critical to emphasize that Ethereum was the first to present smart contracts to the world;
- Mainstreamness: Ethereum is one of the most popular blockchains thanks to its low-entry barrier and unlimited supply;
- Selection: Thanks to Ethereum’s position and notoriety, it boasts the largest collection of non-fungible tokens;
- Sustainability: The transition from a proof-of-work system to a proof-of-stake model has made Ethereum one of the most sustainable blockchains, making it a favorite among those looking to diminish their carbon footprint;
- Versatility: Despite a main focus laying on non-fungible tokens, it’s essential to see beyond them and recognize Ethereum’s merit for creating dApps, as well as the importance fueled in the market.
Bitcoin makes strides toward the NFT zone
When the majority hears about NFTs, they mindlessly associate it with Ethereum. However, they aren’t limited to that blockchain, as the NFT frenzy has expanded well behind this ledger, including Bitcoin.
Bitcoin NFTs may have many taken aback by how well it caught on. The network rapidly gained traction among developers and owners of similar collections, and those linked to Bitcoin have brought a unique element into the play, positioning it among the largest rivals to Ethereum. Bitcoin NFTs are singular and lack a direct tokenization process that other networks display.
However, despite their longstanding presence, it’s only in recent years that they’ve gained traction, causing some to question the durability of their newfound momentum. Additionally, one must make the difference between Bitcoin NFTs and ordinals, the latter of which has only been around since the inception of the current year.
November 4th – a day to remember for Bitcoin
Ordinals and Bitcoin NFTs are justifiably some of the most confusing notions in the decentralized ecosystem. On the one hand, NFTs are the starting point in a more accurate illustration of digital ownership. However, they often call into question their permanence and immutability due to their dependability on off-chain data storage. On the other hand, inscriptions leverage a feature of the Bitcoin blockchain to store a reference to the digital representations, conferring immutability that isn’t common in the NFT ecosystem.
The latest movements in the Bitcoin NFT realm are to be analyzed to make a clearer picture of where it stands compared to Ethereum and other digitally represented assets. In light of this, it’s important to note that November 4th witnessed a remarkable surge in the number of ordinal inscriptions on the blockchain, which fueled a transaction frenzy. Having seen fruitful days from the beginning of November, it’s the 4th that marked the registration of the largest number of assets on the network, reaching an ATH of 698,917 transactions. With this revival in daily ordinal inscription developments, Bitcoin reassesses itself as a notable threat to Ethereum’s longstanding position as a leader in the NFT space.
Closing thoughts
The NFT market sees prices climbing, but the verdict is still pending. Whether Bitcoin, the newcomer into the NFT space, or Ethereum, the blockchain mainly associated with this ecosystem, are bound to win is debatable and only time (and their commitment to evolution) can tell, so keep an eye on the news!
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
