Recently, with the completion of the upgrade of Ethereum EIP-1559, the price of Ethereum ushered in a breakthrough, rising continuously from around 1,700 US dollars and breaking through 3,100 US dollars, an increase of more than 80%. The rise of Ethereum also led to the recovery of the entire cryptocurrency market. The sharp rise in the price of Ethereum has made the prediction that the market value of Ethereum surpasses Bitcoin has sounded again. Many people believe that in this bull market, the market value of Ethereum will eventually surpass Bitcoin and become the king of the 10,000th coin in market value.

Ethereum EIP-1559

Let’s first take a look at what Ethereum’s EIP-1559 upgrade is, and why is it so powerful? EIP-1559 mainly changes the transaction rules of the current Ethereum network, replacing the previous first-price auction mechanism with a fixed-price auction mechanism, focusing on solving the problem of high transaction costs on the Ethereum network. Thanks to the Roast Boy Creators Alliance!

The so-called first-price auction mechanism is that a group of people bid, but no one knows how much others bid. However, the final result is that the person with the highest bid gets the priority, and the rest are queued for processing. The final result of this mechanism is that transaction demanders will spend more gas fees to ensure that they can get the priority.

After this EIP-1559 upgrade, a basic fee is set for network transaction fees. The basic fee is the necessary payment included in a block, which is a programmed automatic quotation system. Users can choose to accept or decline. Compared with the previous first-price auction mechanism, this quotation mechanism will greatly reduce the user's gas expenses.

However, the upgrade of EIP-1559 has attracted the most attention in the circle because of its destruction mechanism. The fees originally used to pay miners will be permanently destroyed, which will greatly boost the price of Ethereum. This destruction mechanism reduces the number of Ethereum that should have been circulating in the market, reducing the inflation rate of Ethereum. With the development of the Ethereum network, more and more Ethereum will be destroyed every day, and will eventually exceed the daily issuance of Ethereum. This is what we call Ethereum going towards deflation. Formally, this deflationary expectation prompted the price of Ethereum to rebound sharply after the EIP-1559 upgrade.

Of course, for Ethereum miners, the seemingly short-term income of Ethereum may be reduced. However, after the upgrade of EIP-1559, the price of Ethereum rebounded, and the decline in the income of miners was not significant. After the upgrade, the transaction costs of the Ethereum network will decrease, and the development space of the Ethereum network will be greater in the future, and miners will naturally benefit more from it.

We all know that Bitcoin has experienced two halvings, and after each halving, Bitcoin has increased tenfold, which has also created the current price of Bitcoin. The effect of Ethereum’s destruction mechanism this time is no less than the two halvings of Bitcoin, and everyone’s expectations for Ethereum are also quite high. It has almost become the consensus in the industry that the market value of Ethereum will surpass Bitcoin in the future.

Bitcoin "Satoshi" Era

While everyone is paying attention to Ethereum EIP-1559, Bitcoin has also ushered in a new era-the Bitcoin "Satoshi" era. Cryptocurrency exchange Bitfinex has launched a "SAT mode" feature on its trading platform, enabling Bitfinex users to denominate bitcoin in satoshis, bitcoin's smallest unit of account. In fact, many people have predicted that as the value of Bitcoin continues to increase, it will be a matter of time before transactions are settled in units of "Satoshi". However, when this era really comes, it is still very exciting, which means that Bitcoin has more room to rise.

For simple science, 1 bitcoin (BTC) is 1000 millibits (mBTC), and 100W microbits (uBTC). 100 million Satoshi. Satoshi is the smallest unit of Bitcoin. Based on the current price, the value of 1 Satoshi is about 0.00045 US dollars, which means that 45 US dollars can buy 100,000 Satoshi bitcoins. Think back to when animal coins were popular, investors’ desire to buy was stimulated by the low price. Now that Bitcoin is traded in the form of Satoshi, these investors will naturally flock to it, and the purchasing power of Bitcoin will be further enhanced.

After Bitcoin is divided in units of Satoshi, on the one hand, it will reduce the dimensionality of the pet-type tokens that disrupted the market before; As it expands, its value will naturally rise.

In addition, as companies such as Amazon, Xiaomi (overseas), and AMC began to accept bitcoin payments, the demand for bitcoin transactions in units of "Satoshi" has gradually increased. The market is driven by demand, and it is also a market trend to subdivide Bitcoin and trade with the smallest unit "Satoshi".

Bitfinex's introduction of Bitcoin trading in units of "Satoshi" is just the beginning, and more exchanges will follow suit in the future. The "Satoshi" era of Bitcoin has officially come, which means that the price of Bitcoin will also rise more rapidly.

When Ethereum EIP-1559 met Bitcoin "Satoshi" era, the competition between Ethereum and Bitcoin continued. In the end, whether Ethereum can emerge from blue and outperform blue, let us wait and see.