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The Ethereum blockchain remains the dominant operating system for decentralized finance, or DeFi, because few alternatives existed until recently, Bank of America said in a research report Tuesday.

The bank, however, said it expects Ethereum adoption and usage to decelerate if the blockchain is not able to increase its "throughput," adding that application developers will probably choose other networks to build on. In crypto, throughput refers to the number of transactions a blockchain can complete per second.

We view Ethereums long-term viability as dependent on its ability to fulfill the vision laid out in its road map, which includes implementing sharding architecture to expand its throughput capacity significantly, analysts Alkesh Shah and Andrew Moss wrote.

Bank of America noted that Ethereums smart contract-enabled platform gave it a first-mover advantage as app developers gravitated to the platform, which led to network effects as the number of decentralized apps (dapps) and users grew.

That early success, however, was a double-edged sword as the large number of transactions resulted in network congestion and surging transaction fees, the note said.

A dapp is an application that uses blockchain technology to keep users' data out of the hands of the organizations behind it. Smart contracts are computerized blockchain protocols that execute terms of a contract.

As in prior tech cycles (PCs, software, internet), new projects are likely to emerge and poorly positioned projects will exit, the note added.

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Ethereum Usage Will Drop If the Blockchain Doesnt Boost Speed: Bank of America - CoinDesk

Joseph Lubin, co-founder of Ethereum and CEO of blockchain firm ConsenSys.

Riccardo Savi | Getty Images for Concordia Summit

The co-founder of Ethereum, Joseph Lubin, hit out at regulators likening the ether cryptocurrency to a security, saying it was more akin to a commodity like oil.

In an interview with CNBC's Arjun Kharpal at Paris Blockchain Week Thursday, Lubin said he was "very confident" ether was not a security.

If it were treated as such, ether would need to be registered with regulators and subjected to much stricter requirements around pre-clearance and reporting.

"Anyone can say anything, it doesn't make it true," Lubin told CNBC.

The concerns that ether may be deemed a security stem from a lawsuit filed by the New York Attorney General Letitia James against Seychelles-based cryptocurrency exchange Kucoin, which alleged the firm failed to register as a securities and commodities broker-dealer and falsely represented itself as an exchange.

In the lawsuit, the NYAG's office listed ether among several tokens listed on Kucoin that the regulator viewed as securities, stating it was a "speculative asset" that relies on the efforts of third-party developers to provide holders with a profit.

"It's unfortunate that that sort of side swipe was made, but I don't think it's all that relevant," James said.

Ether is different from bitcoin in that it fuels an ecosystem of applications where users can make trades, loans, or buy nonfungible tokens.

It is the second-largest token globally, with a market capitalization of $212.8 billion.

Ether was trading 2% lower Thursday in the last 24 hours, according to data from CoinGecko.

"I'm not worried about ether so much," Nic Cary, co-founder of Blockchain.com, told CNBC's Kharpal. "I just don't know where you're going to target that action even if you wanted to pursue it."

"Obviously there are some major lawsuits that are working there way through the U.S. Coinbase has already indicated they're looking forward to letting this lie on its merits."

Previously, the U.S. Securities and Exchange Commission also suggested ether may be classed as a security due to its switch to a new verification system known as "proof of stake."

In a proof of stake model, a blockchain's validators lock up some of their tokens in return for ensuring the security of the network. By doing so, they can gain interest-like yields.

Some regulators believe that model means it fulfils the Howey Test, which states that an investment contract exists if there is an investment of money in a common enterprise and the expectation of profits derived from the efforts of others.

In September, SEC Chair Gary Gensler told reporters that any cryptocurrency or intermediary that allows holders to "stake" their tokens may pass the Howey Test.

Lubin said ether should instead be viewed as a commodity. "People buy barrels of oil with the expectation of profit," he said.

When asked again whether he thinks ether might be a security, Lubin said: "I don't think there's any point to speculate on something that is extremely unlikely."

The SEC has ramped up its enforcement of the crypto industry lately, clamping down on companies and projects it alleges have offered users unregistered securities.

On Tuesday, the SEC issued crypto exchange Coinbase a notice warning the company that it had identified potential violations of U.S. securities law.

Lubin said crypto industry participants are "generally frustrated" with actions from the regulators.

"I think some of us believe that many of the actions are right and reasonable," he said, adding "more clarity" was needed. "We've seen focus on things that should see real scrutiny and we've seen misunderstandings."

WATCH: Bitcoin at $10,000 or $250,000? Investors are sharply divided on 2023

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Ethereum co-founder says ether not a security, compares it to oil after regulator claims - CNBC

Ethereums native token, Ether (ETH), continues its multimonth downtrend against Bitcoin (BTC) in March, rising 5.5% versus the latters 19.5% gains on a month-to-date timeframe.

As of March 23, the ETH/BTC pair was down about 9% month-to-date to 0.0633 while staying on course to record its worst month since September 2022, when it fell 11.75%.

From a fundamental perspective, traders preferred Bitcoin over Ether, hoping it would protect them from the ongoing banking turmoil in the U.S. and other parts of the world. The narrative gained momentum in recent weeks as Wall Street investors like Cathie Wood see Bitcoin as a potential flight to safety asset.

As a result of the growing speculation, Bitcoin outperformed traditional assets after March 8, when signs of trouble appeared at Silicon Valley Bank. In doing so, BTC also fared better than the altcoin market combined, including Ethereum.

However, from a technical perspective, Ethereum is positioned for a comeback versus Bitcoin.

At least two technical indicators pose the possibility that ETH/BTC will rebound sharply in the coming weeks.

Related:Ethereum price at $1.4K was a bargain, and a rally toward $2K looks like the next step

First, the pairs three-day relative strength index has dropped below 30, which technical analysts consider an oversold area.

Second, Ethers drop versus Bitcoin has landed its price near its ascending support level (buy zone in the chart below).

A similar scenario in the JuneJuly 2022 session preceded an approximately 60% rally toward ETH/BTCs descending trendline resistance (sell zone in the chart above). If the fractal plays out, the pair could rally toward the same resistance level by June 2023.

In other words, Ether has a decent chance of rebounding by more than 15% to around 0.075 BTC. Conversely, a break below the ascending trendline support will invalidate the bullish fractal.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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Ethereum faces 6-month lows versus Bitcoin Will ETH price rebound? - Cointelegraph

Ethereums censorship problem seems to have changed course over the past six months. After the government's Office of Foreign Asset Control sanctioned Tornado Cash transactions to U.S. citizens in August, the vast majority of blocks added to the blockchain were OFAC compliant.

Now, the share of censored blocks has shrunk to less than a third in what might be seen as a comeback for Ethereums anti-censorship ethos.

According to the site MEV Watch, during the past weekend and into the beginning of this week, roughly one in three blocks that made it onto the Ethereum blockchain was OFAC compliant. This means that about 30% of blocks excluded transactions sanctioned by the OFAC, including Tornado Cash.

Flipping that around, more than two-thirds of blocks that made it onto the Ethereum blockchain over the last 24 hours are not OFAC compliant.

Since Ethereum went through the Merge in September, about 85% of the blocks that made it onto the blockchain participated in a middleware known as MEV-Boost, where validators can request pre-made blocks from builders.

MEV-Boost is a software that helps validators earn MEV, or maximal extractible value, which are profits that come from rearranging or including certain transactions within a block. The MEV-Boost software was innovated by Ethereum research and development team Flashbots in order to distribute MEV among validators more equally.

While MEV-Boost hasnt been integrated into Ethereum at the protocol level, its widely used by the Ethereum ecosystem, as 85% of validators have relayed blocks via the middleware component. Flashbots also has its own relayer for validators to connect with, used by roughly 25% of validators.

After OFAC sanctioned Tornado Cash, there was debate over whether validators should include those transactions or not. Ever since then, the Ethereum community has continued to push for a censorship reversal, and the results of those efforts now appear to be paying off thanks, in large part, to the introduction of new, non-censoring relays.

At the time the sanctions went into effect, most validators were connected to Flashbots MEV-Boost relay, which Flashbots immediately programmed to censor transactions by default.

In response to community backlash, however, Flashbots raced to complete the process of open sourcing its code for MEV-Boost, so others could develop their own non-censoring relays.

In November, Agnostic and ultra sound relays with a non-censoring version of MEV-Boost were introduced. Since then, they have risen up in the ranks of relays delivering blocks on Ethereum. Flashbots accounts for delivering about 26% of the blocks over the past 14 days, while Agnostic and ultra sound each have delivered roughly 20% of the blocks over the past 14 days.

Over the weekend, Agnostic and ultra sound each delivered more blocks on Ethereum than Flashbots did.

Martin Kppelmann, co-founder of Gnosis Chain, which runs the Agnostic relay, told CoinDesk that it took some time to get the word out and demonstrate that we offer a reliable relay.

Now that validators have had the opportunity to experiment with MEV-Boost, many have started to turn to alternative relays like Agnostic and ultra sound.

The number of validators that are connected to us is constantly growing, Kppelmann said. We were already able to deliver the most blocks of all relays for some period of time.

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Latest Ethereum Blocks Suggest Validators Are Reversing Censorship - CoinDesk

Ethereum and Bitcoin are two distinct powerhouses, each offering unique use cases and capabilities that are disrupting and transforming legacy institutions. Each has its maximalist devotees, but the trend is towards synergy and away from a zero-sum approach.

As the crypto ecosystem continues to expand, these two titans are driving innovation and adoption through different approaches. This article delves into Ethereum and Bitcoins unique strengths, showcasing their role in the evolving crypto landscape.

Ethereums journey began as an ambitious project, seeking to expand the possibilities of blockchain technology. While Bitcoin was supposed to excel as digital gold, Ethereums flexibility and adaptability have positioned it as the most popular blockchain.

Diverse applications, including decentralized finance (DeFi), non-fungible tokens (NFTs), and blockchain gaming, contribute to Ethereums growing influence in the crypto space.

The DeFi sector, driven by Ethereums smart contracts, has fundamentally changed financial services. Users can now access a variety of products without relying on traditional intermediaries. Ethereum-based lending and borrowing platforms such as Aave and Compound, as well as decentralized exchanges like Uniswap and SushiSwap, grant individuals unparalleled control over their assets.

Decentralized autonomous organizations (DAOs) have also emerged, enabling communities to govern themselves and allocate resources through consensus. Projects like MakerDAO and the decentralized insurance platform Nexus Mutual exemplify Ethereums potential to foster innovation, attracting developers and users alike to its ever-growing ecosystem.

The NFT market exploded in 2021, disrupting the art, collectibles, and digital content industries. Ethereums blockchain stands as the backbone for this phenomenon, enabling artists and creators to mint unique tokens representing ownership of digital assets. These tokens, traded on platforms like OpenSea and Rarible, have democratized access to art and collectibles, connecting creators and collectors like never before.

Notable examples include the sale of digital artist Beeples Everydays: The First 5,000 Days for $69 million and the meteoric rise of CryptoPunks, a collection of 10,000 unique pixel art characters. Moreover, NFTs have become an essential tool for digital content creators, allowing them to monetize their work through royalties and secondary sales. Ethereums role in this transformative market demonstrates its potential to reshape industries and redefine value.

Blockchain gaming is another frontier where Ethereum shines. Developers leverage its robust capabilities to create immersive experiences, offering players new levels of ownership and engagement. Tokenized assets within these games grant players genuine ownership of digital items, which can be traded or sold in decentralized marketplaces.

Axie Infinity, a popular Ethereum-based game, allows players to collect, breed, and battle digital creatures called Axies. These Axies can be traded on a decentralized marketplace, creating a thriving in-game economy. Additionally, Ethereum-based games often feature decentralized economies, giving players the power to influence and shape in-game worlds. This innovation fosters deep engagement as players contribute to their virtual environments and earn rewards for their efforts.

Bitcoin, the original cryptocurrency, has remained the most valuable digital asset since its inception in 2009. Its ability to maintain value over time has earned it the moniker digital gold.

As a decentralized, finite, and censorship-resistant currency, Bitcoins strengths lie in its simplicity and security.

One of Bitcoins primary use cases is as a store of value. Its scarcity, with a maximum supply of 21 million coins, ensures that it remains a deflationary asset, making it an attractive hedge against inflation. Many investors consider Bitcoin a safe haven, similar to gold, during times of economic uncertainty.

In addition to its scarcity, Bitcoins robust security and decentralized nature have contributed to its enduring appeal. Its proof-of-work consensus mechanism, which relies on a vast network of miners, ensures the networks integrity and resilience against attacks.

Furthermore, Bitcoins global acceptance and liquidity make it an ideal medium for cross-border transactions. Lower fees and faster transaction times compared to traditional remittance services have popularized Bitcoin as a means of transferring value across borders.

Bitcoins position as the most valuable cryptocurrency is a testament to its unique qualities as digital gold and a reliable store of value. These attributes, combined with Ethereums versatility, demonstrate that both cryptocurrencies play crucial roles in the evolving blockchain ecosystem.

As Ethereum continues to gain adoption, questions arise about its potential to overtake Bitcoin as the leading cryptocurrency. Ethereums real-world applications span multiple industries, and its growing popularity is hard to ignore.

Nonetheless, the two cryptocurrencies serve different purposes. Bitcoins scarcity and established reputation make it a reliable store of value, while Ethereums versatility fuels its expanding use cases. It is not necessarily a zero-sum game, as both cryptocurrencies can coexist, fulfilling distinct needs within the market.

One notable development is Ethereums transition to Ethereum 2.0, which aims to improve its scalability, security, and sustainability through a shift from proof of work to proof of stake. This upgrade and others could further bolster Ethereums position as a leading blockchain platform.

Ultimately, Ethereums growth and development showcase its potential to challenge the status quo, pushing the boundaries of blockchain technology and establishing its place as a formidable force in the crypto world.

As the crypto landscape evolves, Ethereum and Bitcoin remain at the forefront, each commanding a loyal following. Ethereums innovative spirit challenges Bitcoins dominance, but both cryptocurrencies offer unique value propositions that appeal to different audiences.

Visa, the global payments giant, has already begun utilizing Ethereums blockchain to settle transactions in the stablecoin USDC. This move signifies the growing acceptance and adoption of Ethereums technology in mainstream finance.

Meanwhile, projects like Stacks aim to enhance Bitcoins capabilities by building smart contracts and other functions on top of its blockchain. Stacks demonstrates that Bitcoins potential extends beyond its status as digital gold, opening up new possibilities for the original cryptocurrency.

The future of cryptocurrency may hinge on the ability of Ethereum and Bitcoin to coexist and complement each other. Theyll likely both play crucial roles in shaping tomorrows economic terrain as the lines between digital gold and utility blur.

With the popularity of Layer 2 solutions such as Polygon and Optimism for Ethereum and platforms like Stacks for Bitcoin, the crypto ecosystem is poised to become even more robust and versatile. This progress opens up new possibilities for developers and users alike, sparking creativity across both platforms.

As the decentralized world continues to expand, the combined strengths of Ethereum and Bitcoin may lay the groundwork for a more inclusive, transparent, and efficient financial future.

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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Ethereum and Bitcoin: Diverse Use Cases Fueling a Dynamic ... - BeInCrypto