Ethereum: a viable bitcoin alternative?

Only weeks ago, Ethereum was so close to overtaking bitcoin and becoming the world’s most valuable public blockchain by market capitalisation.

Today the story is different – the cryptocurrency is reeling from a shocking fake news report that has exposed insecurity as an investment vehicle.

By Wednesday 21, ethereum had plunged from a peak of over $400 in mid-June to only 10 cents according to CoinBase’s GDAX Exchange following a fake report that Vitalik Buterin, co-founder of the cryptocurrency had died in a car crash. The market capitalisation also fell to less than 70 percent of bitcoin, down from more than 82 percent mid-month.

Buterin later posted of himself on his Twitter handle @vitalikbuterin to prove he was alive. Although the value of the cryptocurrency has recovered somewhat, but it is clearly struggling to regain the trust that made it a viable alternative to bitcoin and pushed it to more 4,000 percent in value by mid-2017.

To be sure, Ethereum came to limelight on the back of the controversy that surrounded bitcoin’s future. That controversy it should be noted has led to an imminent bitcoin upgrade proposal named Segwit2x set to take place on July 21 and August 1. Although the upgrade is meant as a way to prevent any split of bitcoin, the cryptocurrency is still struggling to gain back investors confidence.

In terms of an alternative to bitcoin, ethereum may not be there yet.

For one, compared to the hundreds of thousands of stores that accept bitcoin, ethereum is hardly used at all for online purchases.

It does not have any known merchant infrastructure, no payment providers like bitcoin and there is little evidence that it is being used for remittance or other transactional purposes.

Notwithstanding its numerous challenges, some analysts do believe that ethereum will still take over top spot in terms of market capitalization from bitcoin before the end of the year.

But will that change market acceptability deficiencies, is left to time.