Are Bitcoin Dead and Ethereum obsolete? Here is what Ark Invest says about Cathie Wood

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Despite a lackluster phase lately, Bitcoin (CRYPTO: BTC) is still trading with notable gains since the start of the year.

A new report from Cathie Wood’s Ark Invest examines the validity of the apex currency in the face of changing crypto market dynamics.

Bitcoin as Self-Sovereign Digital Money: Recent rhetoric in the crypto space suggests that Bitcoin is dead and Ethereum (CRYPTO: ETH) is obsolete and that new smart contract blockchains that allow faster and cheaper transactions are the future, said Frank Downing, analyst at Ark Invest.

The point of view was corroborated by the recent token appreciation associated with blockchains such as Solana (CRYPTO: SOL) and Avalanche (CRYPTO: AVAX) and the endorsement by top crypto funds like a16z, Multicoin Capital and Three Arrows Capital, he added.

Those who support the point of view are misguided as they overlook the fact that each blockchain optimizes and maintains the integrity of its data stored in a separate way, making tradeoffs to achieve the appropriate functionality and security for a use case. specific, the analyst said.

Bitcoin offers the deepest function of blockchain technology, the foundation of “self-sovereign” digital currency, Downing said.

Thanks to its fair launch and decision to forgo features like smart contracts, only Bitcoin has optimized itself to compete in the “money revolution”, which requires assurance of data integrity and exclusion from censorship in the face of nation-state attacks. , he said.

Fair launch is a fair and transparent initial distribution of coins in a blockchain project.

Bitcoin’s reluctance to change its design, though often criticized, is a feature that provides the stability and consistency needed to serve as a true global currency, Downing said.

Related Link: This Big U.S. Investment Bank Doubles Bitcoin Exposure

Evolving networks run the risk of centralization: Smart contract blockchains like Ethereum, by contrast, are competing in a “technological revolution,” the analyst said. This is best illustrated by the rise of decentralized finance and NFTs, he said.

The technological revolution requires diverse functionality and higher throughput to accommodate more use cases, often at the expense of the level of decentralization and stability offered by Bitcoin, Downing said.

“As the market decides the appropriate level of decentralization required for each use case, evolving networks run the risk of centralization and, in our view, a return to the institutional status quo. ”

Diversity creates healthy competition: According to the analyst, comparing blockchains without recognizing their distinctive designs, use cases and value propositions is misleading and counterproductive.

Crypto opportunities evolve in parallel, each requiring different network implementations and design tradeoffs, the analyst said. Diversity will create competition that will be healthy for the crypto space as a whole, he added.

Related Link: Why Cathie Wood Thinks Ethereum Is More Undervalued Than Bitcoin

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