Insider Brief

Ethereum co-founder Vitalik Buterin has proposed a hard fork strategy aimed at safeguarding Ethereum funds against potential quantum computer attacks. This proposal has ignited a widespread discussion on the necessity of quantum security measures within the blockchain ecosystem, as reported by Blockchain.News.

Buterins proposed strategy involves a series of measures designed to fortify Ethereums defenses in the event of a quantum computing breach.

A quantum computers theoretical ability to solve certain mathematical problems far more efficiently than classical computers are the cause for concern. These cryptographic techniques serve as much of blockchains security. Quantum computers could again, theoretically undermine Ethereums cryptographic bedrock by decrypting private keys and compromising the integrity of smart contracts. This quantum capability could also disrupt consensus mechanisms, centralizing control or threatening the security of staked assets, which would Ethereums long-term viability and undermining trust in the platform.

Key Steps

Key steps were discussed in the Ethereum Research forum. The steps include the reversion of all blocks subsequent to the detection of a quantum attack, the suspension of traditional externally owned account (EOA) transactions to prevent further vulnerabilities, and the introduction of a new transaction type tailored for smart contract wallets that aligns with the anticipated RIP-7560 standard.

The proposal also outlines the implementation of an innovative transaction type or opcode that would enable users to submit STARK proofs. These proofs verify the users knowledge of a private preimage and a public address generated through approved hash functions, culminating in the replacement of the users account code with a quantum-resistant validation mechanism.

Among these deliberations, the web site reported that some community members voiced concerns that these measures would not be effective if people with malevolent intentions secure quantum computers capable of decrypting Ethereum wallets. These skeptics argue that distinguishing between legitimate owners and attackers could be extremely difficult under such circumstances. They advocate for the adoption of NIST standardized algorithms in a hybrid configuration with classical algorithms, such as combining the Dilithium and ed25519 algorithms, despite the resultant increase in block sizes due to the high number of signature and public key sizes of many current post-quantum schemes.

Alternative propositions include the development of machine learning systems dedicated to the surveillance and identification of anomalous transactions, serving as an early warning mechanism to activate a fail-safe fork.

The Ethereum communitys engagement with these quantum security challenges underscores the sectors proactive stance in navigating the security arms race posed by quantum computing advancements. Innovations such as Lamport signatures and ERC 4337-based quantum-resistant smart contract wallets, along with the integration of quantum-safe cryptographic solutions in digital signature applications, epitomize the blockchain sectors commitment to resilience and adaptability in the face of technological threats.

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Vitalik Buterin Proposes Hard-Fork Strategy to Protect Ethereum From Quantum Attacks - The Quantum Insider

The ETHTaipei Ethereum Developer Conference is set to take place from March 21 to March 24 in Taipei featuring a lineup of international speakers and teams, including Ethereum co-founder Vitalik Buterin. ETHTaipei is expected to attract over 1,000 attendees.

The four-day event includes two days of conferences and a 40-hour hackathon, offering a direct exchange platform for both Taiwanese and international developers. Topics will focus around Ethereum, ZK (Zero Knowledge), DeFi, and Security, with discussions on latest trends and developments in blockchain technology such as the restaking ecosystem, applications and products of ZK, and the innovative interplay between ZK and AI.

Vitalik Buterin to Share Ethereum's Post-Dencun Upgrade Vision

ETHTaipei will feature a number of high-profile speakers, including Vitalik Buterin, who will deliver a keynote talk on the first day of the conference (March 21). Buterin will share his vision for the future of blockchain and Ethereum, following the recent Dencun upgrade.

The Dencun upgrade, which was completed today, will help improve the performance and scalability of the Ethereum network. At ETHTaipei, Buterin will share more about Ethereum's long-term roadmap and his thoughts on the development of the entire blockchain ecosystem. He will also participate in two panel discussions with researchers and leaders from L1 and L2 solutions, including Optimism, Polygon, Zircuit, and Metis.

Hackathon Prize Pool Reaches $65,000

The hackathon, which kicks off on the evening of March 22, has already accumulated a prize pool exceeding $65,000. The prize pool comes from a number of well-known domestic and international teams, including Consensys, Polygon, OP Labs, Mint Club, Ora, Zircuit, MACI, Ten Protocol, Dyson, Morpheus Labs, OpSec, ThunderCoreScrollSpacemesh, and more.

The hackathon will be held in a hybrid format, allowing for online anonymous participation. On-site amenities include a 24-hour Hacker House and a variety of snacks and beverages, fostering collaboration among developers. Industry experts will serve as hackathon mentors, enabling participants to engage with seasoned professionals and rapidly enhance their skills.

Circle and Quantstamp to Recruit On-Site

Several blockchain companies, including Circle, Quantstamp, XY Finance, and AppWorks, will be present at the booth area, offering face-to-face interactions and recruitment opportunities for developers. In addition, Taiwan Ministry of Digital Affairss Digi Gold Card program will be providing consultation services at the event, with the aim of attracting more foreign digital talent to Taiwan and contributing to the development of the country's digital economy. Nuvo will also be offering on-site tasks and event surprises to add to the fun for attendees and hackers.

ETHTaipei has garnered enthusiastic support from various enterprises. BTSE generously sponsors coffee, Taiwan Mobile provides high-speed broadband internet, and KlickKlack offers wireless network equipment, and we also get vouchers from ShiYun Fried Chicken. Attendees can also enjoy exclusive treats from PaperPlane and several bars. Expect a rich agenda and delightful dining experiences, making this a memorable gathering in Taipei.

ETHTaipei 2024 Event Information

Date: March 21-24, 2024 Location: POPUP Taipei Tickets and event information:https://ethtaipei.org/

Media Contact

ETHTaipei Team ethtaipei23@gmail.com Hana Chang +886-975-856-705

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ETHTaipei: Vitalik Buterin to Share Ethereum's Post-Dencun Upgrade Vision - U.Today

Vitalik Buterin, co-founder of the Ethereum network, identifies Layer-2 scaling solutions as a key element for the platforms advancement. Enabled by the Layer-2 upgrade, the Dencun, which dramatically brought down transaction fees on dApps, he called for development efforts now.

In his opinion, the previous decade has been all about Ethereums internal development; however, the world impact is to come during the next one. The upgrade on Dencun led to a bridge that aims to facilitate two-layer Layer-2 improvements in scalability, privacy, and security.

This shift does not diminish the significance of Layer-1, which will still be the base upon which Layer-2 may be pinned. Nevertheless, a mindset shift would be pivotal for Layer-1 development to transition into a deceleration phase, as this is a critical step towards network stability.

However, Buterin stresses the progress made in the Layer-1 area, among which zero-knowledge-proofs (ZKPs) are recent inventions that make it possible to scale and provide users with privacy. Those tools are examples of how it may become easier to create dApps with Layer-2.

According to him, developers have to be proficient in Layer-2 mechanisms and modern development infrastructure to address challenges related to speed, security, and privacy.

In this case, Ethereum will only achieve its goal to migrate from the old internet and blockchain paradigms to the new ones if Buterins theory holds true and propels Ethereum to significantly impact the internet and traditional finance.

The recent rapid fee reduction across platforms like zkSync Era, StarkNet, Base, and Optimism is creating more room for growth in the number of people interacting with Ethereum.

Also Read: MANTRA Aims to Bring RWA Tokenization to The Middle East and Asia

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Ethereum Shifts Focus to Layer-2 for Scalability and Growth - Crypto Times

Ethereum is already well-positioned to mitigate the impact of a massive quantum computing attack on the network, according to Ethereum co-founder Vitalik Buterin.

In a March 9 post to Ethereum Research, Buterin discussed what would happen if a quantum emergency happened as early as tomorrow.

Suppose that it is announced tomorrow that quantum computers are available, and bad actors already have access to them and are able to use them to steal users funds, Buterin postulated.

The blockchain would have to hard fork and users would have to download new wallet software, but few users would lose their funds, he added.

Buterin explained that the process of such a hard fork would involve rolling back the Ethereum network to the point where it is clear that large-scale theft was occurring and disabling all traditional transactions from that point.

Ethereum developers would then add a new transaction type which forms part of the Ethereum Improvement Proposal (EIP) 7560 to allow transactions from smart contract wallets.

When a user makes a transaction from their Ethereum wallet, the signature of that transaction reveals the public key, and in a post-quantum world, this would see the users private key revealed as well.

The new transaction type that forms the core part of the quantum-resist EIP would leverage Winternitz signatures and zero-knowledge proof technologies known as STARKs to ensure that existing wallets are switched to new validation code, he added.

This validation code leverages ERC-4337 account abstraction the underlying technology of smart contract wallets to prevent private keys from being displayed while signing transactions in the future, rendering these accounts immune from a quantum attack.

Related:Ethereum leans into rollup-centric future as Dencun hard fork looms

According to Buterin, users who have never approved a transaction from an Ethereum wallet are already safe from any potential quantum-related exploit, as only the wallet address has ever been made publicly available.

He also added that the infrastructure needed to implement such as hard fork could in principle start to be built tomorrow.

The advent of quantum computing has been a long-feared inflection point for the crypto industry, as a computer capable of breaking blockchain encryption could see once-untouchable user funds stolen in large volumes and at rapid rates.

However, most computer scientists and developers believe that quantum computing is still a ways off, with Google and IBM engineers estimating that quantum computing wont be sufficiently developed until 2029 at the earliest.

Magazine: Google to fix diversity-borked Gemini AI, ChatGPT goes insane:AI Eye

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A 'simple' hard fork could subvert a quantum attack on Ethereum: Vitalik Buterin - Cointelegraph

Valeria Blokhina

Check out the latest crypto news over the weekend in U.Today's news digest

U.Today summarized its top three news stories about the most important crypto events over the past weekend, check them out.

Despite Bitcoin exploring new highs, CryptoQuant analytics platform is warning market participants that the largest crypto could experiencea major correction soon. In a recentX thread, the analytics platform shared some factors backing the case, underscoring "the Bull-Bear Market Cycle Indicator has flagged an Overheated-Bull phase as prices soared above $65K." Another factor mentioned is miners being overpaid as profitability jumped to the highest level since December 2023. Additionally, CryptoQuant highlighted that traders' unrealized profit margins have reached 57%, which is historically associated with upcoming corrections as traders are bound to take profits eventually. While the platform has not offered its insights into how steep Bitcoin might fall with the impending correction, its founder and CEO Ki Young Ju shared earlier that Bitcoin is likely not going to return to its spot BTC ETF listing price around $46,376.

On Saturday, March 9, Shiba Inu lead Shytoshi Kusama took to X platformto urge the SHIB community to vote for the Bone ShibaSwap (BONE) token as it stands a chance to be listed on the Binance Futures platform. Last week, Binance unveiled a new tool dubbed Binance Futures Next, which allows the community to cast votes for the tokens they want to see listed on the Binance Futures market. At the moment of writing, BONE is ranked fifth on the platform by picks, which comprise 49,205. It is trailing behind Delysium (182,296 picks), Milady Meme Coin (121,755 picks), Baby Doge Coin (67,842 picks) and Metis (65,400). Kusama then added in his next X post that since not all countries can take part in the voting, he urges the SHIB army to press on and help the token to get to first place. Boosted by the news of the potential Binance listing, BONE soared by more than 23% on Friday. Currently, BONE is trading at $1.10, down 0.12% over the past 24 hours.

In a recent blog post, Ethereum cofounder Vitalik Buterinhas shared insights regarding his brain child's resilience against potential quantum threats. He drew attention to the inherent vulnerability of ETH addresses as well as the implications of quantum computing on cryptographic operations. Utilizing the Ethereum blockchain's architecture, Buterin suggested a feasible approach for reducing the risks associated with quantum computing. His approach combines the use of a strategic hard fork with quantum-resistant cryptographic techniques. By going back to a previous block and making changes to the transaction protocols, Ethereum might be able to prevent large-scale fund breaches. Buterin emphasizes the role of advanced cryptographic mechanisms such as STARKs in fortifying Ethereum's security posture against quantum threats. These developments, along with modifications to transaction types and validation processes, could make Ethereum more robust in the event of a quantum emergency.

About the author

Valeria Blokhina

Valeria is the community manager at U.Today. She is a crypto enthusiast and believes that cryptocurrency is the future of finance. Currently, Valeria covers the latest news in the world of crypto and blockchain.

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Bitcoin Shows 'Overheating Signal,' Major Correction Possible; SHIB Lead Issues Crucial BONE Call, Vitalik Buterin Shares Ethereum's Strategy Against...

AEGIS token, associated with the Aegis AI smart contract auditing platform, experienced a significant surge, marking a 92% increase within the last 24 hours, reaching a peak at $0.2987.

This growth comes amid expectations of forthcoming advancements in the Aegis AI ecosystem, as noted by a crypto influencer known as Jolly Green Investor. The influencers enthusiasm was shared in a statement highlighting Aegis AIs imminent introduction of its AI-based security tools, designed to address vulnerabilities in the crypto domain. These tools include AI-powered smart contract audits, token legitimacy audits, protocol monitoring, and bug bounty programs, all part of the soon-to-launch Aegis AI dApp.

According to the crypto influencer, the surge in AEGIS token value is closely linked to Ethereum co-founder Vitalik Buterins emphasis on the need for AI in smart contract auditing and bug detection.

Via an X post on Feb. 19, Buterin expressed his optimism about the use of AI for formal verification of code and identifying bugs, pinpointing this as one of the most significant technical risks currently faced by Ethereum. He advocated for AIs potential to revolutionize this aspect, marking a significant stride towards enhancing security and reliability.

As such, Jolly Green highlighted that Buterins encouragement for Ethereum projects to develop AI-based solutions, combined with the growing anticipation around the Ethereum ETF, positions AEGIS uniquely at the forefront of addressing these challenges.

Further insights were provided by a user responding to the influencer, referencing a recent AMA that unveiled additional features of the Aegis ecosystem. These features include a Bitsensor subnet, an operating system, a DePIN ecosystem, and SKL-based licensing, among others. This expansion introduces new revenue streams for AEGIS token holders, offering them an 80% revenue share.

As of press time, the AEGIS tokens price has adjusted to $0.2452, still marking an impressive 64.3% increase over the previous 24 hours.

The surge in AEGIS price comes as cryptocurrencies linked to AI, such as Fetch.ai, have demonstrated resilience and substantial growth, marking significant price increases amid a widespread market downturn. Further, a recent Coinbase report highlighted that AI-affiliated cryptocurrencies have surpassed the performance of major cryptocurrencies like bitcoin and ether since the start of the last quarter of 2023.

Additionally, these tokens reportedly outperformed major AI-related stocks, including Nvidia and Microsoft, during the same period, underlining the growing role and potential of AI in the cryptocurrency sector.

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AEGIS token surges 92% on upcoming AI tool launches and market optimism - crypto.news

Key Takeaways

Ethereum enthusiasts have every reason to celebrate as the highly anticipated Dencun upgrade makes its debut. The hard fork could signal a pivotal leap for Layer 2 networks. Also, it is buoying hopes that Dencun can help keep ETHs priceabove $4,000.

This upgrade is far from routine, because it represents a significant leap forward in Ethereums ongoing development, with promises of marked enhancements in both efficiency and scalability.

Following last years Shapella upgrade, the Ethereum network is embarking on another evolutionary step with Dencun. This latest development introduces several enhancements aimed at accelerating transaction speeds and expanding Ethereums transactional capacity. A highlight of Dencun is the implementation of ephemeral data blobs through EIP-4844, also known as protodanksharding. Ethereum claims Dencun will reduce Layer 2 transaction fees dramatically.

Dencuns ambition doesnt stop at just making transactions faster. It also seeks to make them significantly cheaper. The upgrade aims to lower transaction fees from an average of $1 to just one cent. Indeed, for smaller transactions, the cost could be just a fraction of a cent. This reduction in fees aims to elevate the user experience, outpacing the benefits introduced by the Merge in September 2022.

Moreover, Dencun introduces a novel approach to data storage for Layer 2 networks with the introduction of blobs. These are designed to store data for about 18 days, thus optimizing costs and enhancing Ethereums scalability.

According to CCN Analyst Valdrin Tahiri, a recent market rally coincided with the Dencun upgrade for Ethereum. Although many indicators point towards a continued upswing, there are worries about the possibility of facing resistance at the $4,000 mark. Despite these concerns, Ethereum remains in a position to maintain its long-term upward trajectory towards setting a new all-time high.

However, EIP-4844 will not directly lead to lower transaction costs on the Ethereum mainnet. Nevertheless, Dencun could indirectly contribute to reduced transaction fees, potentially opening up new possibilities for on-chain activities. These could include on-chain gaming, generative art, and artificial intelligence applications, which were previously hindered by high costs.

EIP-4844 marks the beginning of the Surge phase for Ethereum, as outlined in the updated network roadmap by co-founder Vitalik Buterin in December. The ultimate aim of this phase is to achieve a throughput of 100,000 transactions per second. Following the Dencun update, Ethereums development focus may shift towards further enhancements, such as enabling Ethereum nodes to be run on mobile devices.

Buterin has also responded to a user on Twitter who voiced complaints about high transaction fees.

Tim Beiko, a key figure among Ethereum core developers, shared his enthusiasm on Twitter regarding the imminent Dencun upgrade. The developer community has shown robust engagement, with numerous client teams rolling out versions compatible with Dencun, featuring crucial enhancements for performance and stability.

The Gnosis Chains swift move to embrace the Dencun upgrade ahead of its introduction on the Ethereum mainnet has generated excitement. Joseph Lubin, co-founder of Ethereum, commended the initiative, underscoring its significance for the Ethereum ecosystem.

Some analysts and leading indicators are pointing towards a potential continuation of the current rally, suggesting the asset could reach new unprecedented highs. Influential crypto enthusiast Ali echoes this sentiment, arguing that Ethereums trajectory towards the $5,000 mark is becoming more apparent as resistance levels diminish. Ali highlighted the $4,522-$4,646 range as a critical supply zone, noting that its where nearly 600,000 addresses collectively possess over 1.63 million ETH.

Furthermore, data from the crypto analytics firm IntoTheBlock indicates that the assets recent surge in value has been advantageous for investors, with an impressive 95% of them currently enjoying unrealized gains.

However, there is one word of warning. When the much anticipated Merge saw Ethereum move to a proof-of-stake consensus mechanism in September 2022, ETH did not move anything like as much as it could have done. Investors will be hoping that Dencun will be better for Ether.

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Ethereum Dencun Upgrade: Will it Boost ETH Price or be Another Merge? - CCN.com

Key Takeaways

After Ethereum underwent Dencun upgrade to increase scalability and efficiency, ETH price has been sluggish. Meanwhile, rival blockchainSolanais just 35% down from its all-time high. Is the upgrade givingSolanaa competitive edge?

Ethereums Dencun went live on March 13 and marked a major step in scalability. Ethereum co-founder Vitalik Buterin took toWarpcastto state that they have hit a goal of Basic rollup scaling, which means theyve improved how Ethereum handles a lot of transactions at once.

He continues to state that now ETH is moving on to work on two new things: verkle trees and history expiry.

Verkle trees will make it possible for validators to do their job without needing a lot of computer memory. This is like having a really efficient way to check and keep the network secure without taking up almost nil disk space on the nodes. It will also make it much quicker for someone to start participating in the network as a validator to support the network on their own (solo staking).

Ethereumdeveloper Tim Beiko took to X to state that Dencun update is one of the most complicated changes theyve made to Ethereum since the Merge.

Beiko notes that it also has as many individual updates, known as EIPs (Ethereum Improvement Proposals), as a previous major update called Byzantium.

Meanwhile, ETH price has taken a hit on March 14 and is trading under the psychological level of $4K at press time.

Solanaon the other hand has clocked in gains. As per CoinGecko data, SOL is trading 36% under its all-time high which was surpassed in 2021. It has gained at least 13% in the run-up to the upgrade in 7 days.

The introduction of EIP-4844 is a crucial update as it aims to alter how transaction fees are calculated and reduce costs for L2s. For instance, ArbOS Atlas is also bringing about reductions in fees for users of Arbitrum One. But what is noteworthy is the hike in dollars locked on Solana. In March, the ecofriendly chain has continued to increase its total value locked (TVL) and is inching closer to $4b.

In 7 days, Solana also experienced a positive shift in investor behavior. As per CoinShares data, it attracted $24m in inflows, despite recently facing a downturn in market confidence due to network outage.

Meanwhile,Ethereum, which has had a strong year in terms of attracting investments, witnessed a slight retreat with $2.1m leaving the platform during the same period.

The Ethereum Dencun upgrade sets new benchmarks for scalability and efficiency for L2. Meanwhile, despite the February outage in Solana, inflows continue to pour in for the eco-friendly chain. As Ethereum gears up for further upgrades,Solanais making waves, potentially shaking up the second-largest chain competitively.

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Ethereum Dencun Upgrade: Solana Reaction is a Competitive Stir - CCN.com

Last updated: January 22, 2024 03:11 EST | 1 min read

Last year in May, Ethereum co-founder Vitalik Buterin helped organize an exclusive two-month gathering called Zuzalu in Montenegro.

Around 200 invitees discussed topics like cryptography and longevity while enjoying dinners and swims along the Adriatic Sea coastline. Details were scarce, but the hush-hush retreat has now inspired a new initiativespinoff Zu-villages funded by Ethereum grants.

A recent post on the blockchain crowdfunding platform Gitcoin announced quarterly matching pools totaling 250 ETH, around $590,000 at current prices. This has fueled speculation that Zuzalu may reconvene this year.

The stated goals are advancing pop-up city events and supporting technology-driven projects. Recipients can tap into two pools166.5 ETH for events and 83.5 ETH for tech projects.

To qualify for the matched funds, at least one team member must have been invited to Zuzalu last year and participated for a minimum of one week. The blog post does not state if Zuzalu is happening again this year or provide details on timing or location.

Buterin is supposedly contributing a big portion of the ETH grants, although a representative later backtracked, telling CoinDesk there is no record of Buterin committing funds. His precise involvement is unclear as of now.

The Zuzalu retreat itself is shrouded in some secrecy. It was never announced beforehand and details trickled out after the fact via social media posts. Some paint it as a glorified camp discussing esoteric topics, while others reference a Silicon Valley exclusivity.

But it seemingly made an impression on Buterin and other creators who hope to replicate the temporary community under the Zu-village banner. The requirement of at least one core member who attended Zuzalu 2023 hints at an air of exclusivity around the new pop-ups as well.

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Vitalik Buterin's Zuzalu Retreat Spurs Ethereum-Backed 'Zu-Villages' - What's Behind This Mysterious Gathering? - Cryptonews

Comparisons between Bitcoin and Ethereum have made the topic of many crypto debates, leading to many different conclusions. Bitcoin is the holder of many notable records and achievements, including being the first decentralized cryptocurrency established by Satoshi Nakamoto in 2009, the most valuable digital asset and the one that occupies the largest share in the cryptocurrency market. As a result, Ethereum, which was founded in 2015 by Vitalik Buterin, has always lived in Bitcoins shadow, alongside all the other digital currencies that emerged in its wake, forming the altcoin pack.

Historical cryptocurrency data reveals that the two assets have moved in tandem, with the flagship crypto dictating the price trajectory. Judging by the difference between the current Ethereum price and the Bitcoin price, the latter wins by a landslide. Ethereum always seems to be several steps behind Bitcoin, unable to pose a real threat to its dominance and yank it off its throne.

However, if we delve a bit deeper, we can see that the altcoin leader also showcases a series of strong suits and key metrics that place it at the top of the cryptocurrency hierarchy, in front of its longtime rival, and hodler count is one of the areas where Ethereum excels.

Ethereum hits record number of hodlers in 2023

2023 has been a good year for Ethereum for several reasons. The second-ranked crypto has been on an appreciation journey for the better part of the year, with a 20% gain in the last month and a 38% gain over the past 60 days. Apart from the considerable price increase, Ethereum has also seen a significant surge in hodler numbers.

Hodler is a popular crypto slang term that designates long-term holders of a cryptocurrency. These investors buy and hold onto assets regardless of price volatility, trusting their long-term value and their ability to weather market fluctuations.

According to IntoTheBlock data, addresses that have held Ether for more than 12 months currently make up 72% of all Ethereum holders, reaching the highest level since 2018. At the moment, Ethereum counts approximately 73.9 million long-term holders, after a 44.2% increase, while Bitcoins holder figures stand at 33.6 million.

Hodlers play an important role in the health and performance of digital assets. Coins backed by a large number of holders tend to be less susceptible to market volatility and are generally perceived as more resilient and trustworthy. So, the fact that Ethereums holder community is growing is certainly a positive development for the network.

In addition, Ethereum also outclasses Bitcoin in terms of whales, which refers to persons or entities that own a large amount of a single cryptocurrency, between 1000 and 10,000 coins. By the latest count, the number of Ethereum whale addresses has recently reached 5,370, marking a 12% yearly increase, while Bitcoin whale wallets amount to 1,920.

This proves that Bitcoin is not the only coin boasting record-breaking performances in the cryptocurrency ecosystem. Ethereum outshines the original crypto in many ways, so even though theres still a huge price discrepancy between the two, the top altcoin continues to attract an increasing number of investors.

What prompted Ethereums holder increase?

Not too long ago, Bitcoin used to hold supremacy in hodler numbers as well. Whats more, both Bitcoin and Ethereum have had impressive runs this year and recorded increases in their hodler metrics. So, what exactly caused the tables to turn and lead to such a notable disparity between the two assets?

Ethereums surge in long-term holders can be attributed to a series of factors. One of the most likely causes for the increase is the rise in Ethereum staking registered this year. The amount of staked Ether has nearly doubled since the beginning of 2023, with roughly 24% of all Ethereums circulating supply being locked in staking deposits. Since most staked funds remained untouched for more than 12 months, this led to a major rise in the Holder Ratio.

However, there are other factors that have contributed to the phenomenon which have to do with the purpose and the evolution of the two crypto projects. On one hand, Bitcoin has continued to operate as a deflationary store of value and a peer-to-peer form of digital money, so it hasnt strayed away from its original purpose and use cases.

On the other hand, Ethereum has undergone massive transformations since its launch back in 2013. Designed by Vitalik Buterin as a programable blockchain, Ethereum started its journey as a platform that enables the deployment of decentralized apps (dApps). However, over the years and after multiple upgrades and updates, the Ethereum ecosystem expanded considerably, with applications and use cases spanning across many other areas, including gaming, decentralized finance (DeFi), and non-fungible tokens (NFTs).

Bitcoin is clearly more established and mainstream than Ethereum, having a longer track record in the market and being superior in terms of price performance and scalability. Ethereum is in a weaker position from this point of view, but price action is not the only aspect that attracts investors and drives crypto adoption.

The fact that Ethereum boasts a diversity of use cases and represents a hub for innovation in the crypto sphere has caught the eye of stakeholders and that has led to an increase in hodler numbers.

The Ethereum network also seems to respond better to the changing needs and demands of market participants. The Merge and Shapella upgrades, which saw Ethereum switch from a proof-of-work (PoW) consensus protocol to a proof-of-stake (PoS) mechanism, stand as proof of Ethereums adaptability, flexibility and its constant focus on innovation. These attributes have turned it into a decentralized blockchain powerhouse and continue to draw in more investors and holders.

Final thoughts

Ethereums record number of long-term holders might not be enough to steal the leader position from Bitcoin, so its rather premature to make assumptions about a potential flippening in the near future. However, changes in this key metric serve as an indicator of Ethereums strength and potential and are worth taking into account by crypto enthusiasts.

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Ethereum's record number of hodlers downgrades Bitcoin to second place - Baltic Times