Bitcoin and Ethereum have always been compared since they’re two of the most popular cryptocurrencies on the market. Although they serve different purposes since Bitcoin is a store of value and Ethereum is used more as a way to access decentralized applications and environments, they’ve always had some similarities that investors contemplated upon.

They both use similar cryptographic protocols and leverage decentralization and public ledger transactions but have different use cases and technology. Bitcoin, for instance, still has its PoW consensus, while Ethereum switched to PoS. At the same time, Bitcoin is used as a means of exchange, which propelled its price to the moon, while the Ethereum price had a slowed development since the cryptocurrency was more prevalent on its private blockchains rather than in real life.

However, a team of venture capital companies gathered their forces to combine Bitcoin and Ethereum in one of the most promising crypto projects ever.

Welcome BOB, a layer-2 blockchain solution

BOB, or Build on Bitcoin, will be the first Bitcoin layer-2 solution compatible with the Ethereum Virtual Machine. The project raised $10 million in funding, attracting numerous investors due to its great potential. In addition to investors, the collaboration includes various companies and creators whose main goal is to roll out the layer solution on the EVM to make smart contracts available on Bitcoin.

The team’s white paper was convincing enough for investors, and it included a few aspects of how the project would unfold. For instance, computations would be executed off-chain and verified again on-chain to avoid network congestion. Many people are skeptical about the performance of this project because the risk of straining the network and compromising users’ experience is considerable, so things must be done carefully.

Why does Bitcoin need Ethereum’s smart contracts?

Ethereum’s smart contracts proved to be one of the best technologies for crypto as they automate transactions when both parties achieve their pre-determined conditions. On the other hand, Bitcoin was left behind in numerous technological aspects, which made it inefficient and unsustainable, which is why the team’s goal is to make Bitcoin programmable.

The upcoming project can allow zero-knowledge proofs on Bitcoin, which is known for ensuring high transaction throughput on Ethereum. Ideally, there will be provers and verifiers on the network that produce outputs and enable transactions efficiently.

Still, some people online pointed out the limitations of this project, stating that off-chain data management is significantly expensive and introducing a prover and a verifier isn’t as efficient as it seems.

Taking only what’s best from Bitcoin and Ethereum

As previously mentioned, Bitcoin and Ethereum are considerably different, but if we take only what’s best in them and create a new blockchain or a tool that can revolutionize the market, Ethereum’s blockchain capabilities, including smart contracts, dApps and NFTs, would be leveraged based on Bitcoin as a store of value, it may be possible to expand the crypto ecosystem into worldwide adoption easier.

Still, not all users are interested in both cryptocurrencies, which is why the BOB project might not have such a massive impact on the community. Some investors are only interested in Bitcoin for its intrinsic value, while developers want to use Ethereum to create new systems and tools that contribute to innovation.

Indeed, Bitcoin is much more valued than any other cryptocurrency and has a great acceptance rate within traditional finance that Ethereum might never reach. On the other hand, smart contracts on Ethereum are unique and cannot be used on Bitcoin even through it could make it more efficient.

Can Ethereum overcome Bitcoin?

Besides collaborations and unifications, Bitcoin and Ethereum will continue to fight for supremacy. For now, there are two sides to the story: people who believe Bitcoin will never be outshined by another currency and those who see Bitcoin as ancient and Ethereum as the potential new leader on the market.

However, despite the numerous opinions, it may be difficult for Ethereum to reach Bitcoin’s heights since it wasn’t programmed for the same purposes. Therefore, it cannot fulfil the exact expectations. Bitcoin was created explicitly as a store of value, whereas Ethereum was intended to be more than that from the beginning.

The price of Ethereum might not get to Bitcoin’s very soon, but that doesn’t mean it’s not as valuable. Ethereum focuses more on blockchain functionalities, which helped it propel itself into the mainstream as it was the backbone of NFTs when they first emerged online.

The crypto market is unpredictable

Besides all the suppositions and forecasts, the crypto market is considerably unpredictable, and we can’t be sure whether Bitcoin will always be a leader or will be replaced by a revolutionary cryptocurrency. There were always surprises in this industry, such as the increased popularity of crypto memes that have no utility but serve as a way to entertainment.

At the same time, crypto ETFs have also been on the rise lately, especially BTC ETFs, so you never know when the trends will turn upside down. This is why investors, traders, and developers are advised to follow the trends closely and diversify their portfolios as well as change their strategies frequently, because the dynamic is more important.

On another note, the crypto market is also volatile, so the Bitcoin price may be below the altcoin market because they fluctuate dependently. Hence, it’s best to watch what cryptocurrencies are performing well during certain times and take advantage of these changes. Even if some investors compare Bitcoin with gold as an asset, the cryptocurrency has yet to become accessible and stable regarding price and investment.

What do you think about combining Bitcoin with Ethereum?

A recent project called BOB (Build on Bitcoin) is set to blend Ethereum’s smart contract function with Bitcoin’s blockchain through a new layer-2 solution. Most of the activities will be performed off-chain but also on-chain to avoid network congestion. Many investors saw the potential of this massive collaboration, which is why the team received generous funding to take the project to the next step.