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Tether’s Ardoino: Ethereum ‘cannot compete’ with Bitcoin

By Daniela Ešnerová

11:30, 14 September 2022

Illustration of The Merge
“The fact of the matter is that Bitcoin is the only asset out there that has a solid narrative, one that hasn’t changed,” Ardoino says – Photo: Shutterstock

All eyes in crypto are on the world’s second-biggest blockchain, Ethereum, as it is about to undergo its long-anticipated and repeatedly delayed network upgrade.

The most hyped-up event in crypto history has shot ether (ETH) into the spotlight. 

But despite its recent popularity, ETH has some big shoes to fill when it comes to challenging bitcoin’s primacy among cryptocurrencies. 

ETH “still doesn't march” and “cannot compete with” bitcoin, points out Paolo Ardoino, chief technical officer of the world’s biggest stablecoin issuer Tether (USDT) and cryptocurrency exchange Bitfinex.

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ETH to US dollar

‘Ethereum still doesn’t match bitcoin’

“While bitcoin is a form of money, Ethereum is stuck between claims of being a form of money and claims of being a platform, but ETH cannot compete with bitcoin on the money front because there is no fixed supply, and it isn’t really a world computer yet because it has a shared global state and hence too slow to be scalable,” said Ardoino.

The Merge – Ethereum blockchain’s upgrade from proof-of-pork (PoW) to a less energy-demanding proof-of-stake (PoS) consensus mechanism – is expected to cut the Ethereum network’s electricity consumption by 99.98%.

XRP/USD

0.61 Price
+1.890% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

DOGE/USD

0.14 Price
-2.080% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

SOL/USD

181.07 Price
-1.890% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.2652

ETH/USD

3,449.98 Price
-1.630% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

As regulators all over the world move to restrict the energy-demanding PoW algorithm, some people, like Alex de Vries – researcher and founder of Digiconomist, which is known for providing data on cryptocurrencies’ environmental impact – suggested the Bitcoin blockchain will need to follow in Ethereum’s footsteps.

Ethereum's co-founder, Vitalik Buterin, has said that Bitcoin will have to switch to PoS to keep its network more secure.

BTC to US Dollar

But The Merge is not a panacea to blockchains, with Ardoino pointing out that it won’t help Ethereum achieve higher decentralization – surely one of the main propositions of cryptocurrencies in the first place. “The real message here isn’t what The Merge will change but what asset already exists that provide the core themes of our industry, which includes true decentralisation,” said Ardoino. 

“The fact of the matter is that bitcoin is the only asset out there that has a solid narrative, one that hasn’t changed. Ethereum still doesn’t match bitcoin because its narrative keeps shifting.”

Markets in this article

ETH/USD
Ethereum / USD
3449.98 USD
-56.93 -1.630%
BTC/USD
Bitcoin / USD
67688.65 USD
-178.3 -0.260%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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