Billionaire Mark Cuban Explains Why He Thinks Ethereum Will Overtake Bitcoin

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Mark Cuban, the billionaire investor made famous by the reality television series Shark Tank, has recently changed his mind about bitcoin and cryptocurrencies.

Cuban made headlines when he said he'd "rather have bananas than bitcoin," claiming that cryptocurrency is "too complicated." However, the owner of the Dallas Mavericks has since come around to cryptocurrencies, praising the emerging decentralised finance (DeFi) space, which is largely built on top of ethereum, the second-largest cryptocurrency after bitcoin.

Now, as the value of bitcoin and other cryptocurrencies exceeds $2 trillion, Cuban has revealed that he believes ethereum's long-awaited 2.0 upgrade will spur the development of apps that "dwarf" bitcoin.

"I believe the applications leveraging smart contracts and extensions on Ethereum will dwarf bitcoin," Cuban said on her Unchained podcast.

The bitcoin price has risen by around 700 percent in the last year, as high-profile billionaires Elon Musk and Jack Dorsey support it, Wall Street titans roll out bitcoin services, and investors worry that inflation will undermine the value of traditional currencies.

The massive bitcoin price rally, however, has been surpassed by ethereum (and a handful of smaller cryptocurrencies), with the ethereum price increasing by a whopping 1,100 percent since April 2020.

Cuban believes that upcoming ethereum upgrades, which are not expected to be completed until at least 2022, will "give some people a reason to use ethereum as a store of value over bitcoin."

Last year, ethereum began implementing its major 2.0 upgrade, which is intended to improve scalability and security by transitioning the ethereum network from bitcoin's proof-of-work (PoW) consensus algorithm to the proof-of-stake (PoS) algorithm.

This essentially means that those who receive ether tokens as a reward for maintaining the network will be removed from the process in order to optimise transaction settlement—with ethereum users instead able to deposit their tokens to secure the network and earn rewards instead.

"With proof-of-stake, you're going to be able to have some multiple, a significantly higher multiple, in transactions per second, which is going to improve utilisation and the opportunities to create on ethereum," Cuban told Shin, referring to the latest cryptocurrency craze for NFTs (non-fungible tokens) as "just proof of concepts" for what smart contracts can do.

"In a few years, I think ethereum and maybe two or three other blockchains will have their place, and those will be the winners," Cuban said, adding that he's not about to sell his bitcoin but that he does "own a lot more" ethereum than bitcoin.
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