The Flippening: why the Ethereum crypto supremacy is only about time

Discover the imminent crypto revolution that's beyond BTC bubbles! The flippening is so evident, it's like debunking flat earth theories. Dive in! 🚀🌍

Table of contents:


  • A new industry


  • My 2018 Flippening Research (Tech Prospective)

  • My 2019 Flippening Research Draft (Narrative Prospective)

Flippening Analysis

  • The 2023 Flippening Research Part 1 Analytics

  • The 2023 Flippening Research Part 2 Financials


  • Why still not happened?

A new industry

Currently, the cryptocurrency landscape is largely swayed by Bitcoin and Tether's dynamics. Bitcoin's halving mechanism orchestrates cyclical bull and bear markets, which reverberate throughout the sector. These market swings deeply influence investor sentiment. In bullish phases, there's a rush to liquidate assets before the bearish downturn, regardless of a project's intrinsic value or performance. Once the bear phase kicks in, prices often nosedive.

Such volatility breeds a set of entrepreneurs and investors who prioritize short-term gains over long-term vision. This stifles genuine innovation, leading to a surge of fleeting, hype-driven projects that often fade away under market strains. Yet, this narrative might pivot with the anticipated Ethereum/Bitcoin 'flippening'—a potential scenario where Ethereum's market cap overtakes Bitcoin's. If Ethereum takes the lead, it could pave the way for a steadier economic landscape.

Ethereum's Proof-of-Stake (PoS) consensus, coupled with its nuanced inflationary and deflationary tactics, promises a more equilibrated market. Contrasting Bitcoin's power-hungry mining, Ethereum's PoS involves validators 'staking' their coins to authenticate transactions. This eco-friendly method deters massive sell-offs, penalizing validators for dishonest actions.

Additionally, Ethereum's EIP-1559 mechanism incinerates a fraction of transaction fees, introducing a deflationary element to its inflationary framework. This results in a more consistent monetary policy, devoid of Bitcoin's price rollercoasters.

To sum up, Ethereum's ascendancy could transition the crypto realm from short-lived speculation to a focus on enduring growth and commitment. By tempering market unpredictability and curbing fleeting ventures, Ethereum's dominance could mark the onset of a more grounded and resilient cryptocurrency era. This potential post-flippening phase could spotlight enduring innovation, value generation, and industry stability.

The flippening will be the cure of the crazy betting industry we live today, to a new industry driven by real applications values. Once this happened we’ll live a golden age of worldwide entrepreneurship without cultural barriers.

Let’s try to understand together why the flippening is just around the corner and when!


Five years ago, I wrote this on Hackernoon:

In this old article (the industry was different then), I begin by questioning Bitcoin's status as the 'Digital Gold' of the cryptocurrency world. I pointed out that while Bitcoin was the first to introduce the concept of a trustable ledger, many other cryptocurrencies have since emerged that offer the same functionality but at a faster speed and lower cost.

I also highlighted the slow and expensive nature of Bitcoin's blockchain, which has not seen any significant improvements or plans for future enhancements. Often in the tech industry, first movers are overtaken by late entrants who offer better solutions, taking into account some points:


  • Technological Perspective: Bitcoin, the first generation of blockchain technology, is slower and more expensive than many other cryptocurrencies that have since emerged. Bitcoin's technological stagnation could be a disadvantage.

  • Community: The Bitcoin community is described as being driven more by speculators than innovators and is seen as conservative and stagnant. This lack of innovation and vision could hinder Bitcoin's growth.

  • Historical Parallels: Parallels between Bitcoin and companies like IBM and Nokia, which were once market leaders but were eventually surpassed by more innovative competitors.

  • Use Cases: Bitcoin's use cases are questioned, stating that it has failed as a payment system due to its slow, non-scalable, and expensive nature.

  • Decentralization: While Bitcoin is decentralized, I have questioned whether this is a unique competitive advantage, as many other projects are also decentralized.

  • Bitcoin as Digital Gold: I have challenged the notion of Bitcoin as 'digital gold', suggesting that other cryptocurrencies could potentially fulfill this role.

  • Financial Analysis: Bitcoin's dominance in terms of market capitalization has significantly decreased since 2017.

One year later in 2019, I was drafting more profound research about the flipping, I didn’t have the time to publish it, because meanwhile I was starting my journey at DFOhub.

I published the draft here:

This is a resume from that research:


Medium of exchange theory:

Bitcoin maximalists envision Bitcoin as the primary medium of exchange, similar to the role of the US dollar post-WWII. However, Bitcoin's dominance in daily trading has been surpassed by Tether (USDT), a stablecoin, which has also been transitioning from Bitcoin's OMNIA layer to Ethereum's ERC20 token. This shift challenges Bitcoin's position as the leading cryptocurrency and highlights the difficulty of recognizing Bitcoin as a medium of exchange.

Stablecoins like Tether, while useful for short-term speculation, are centralized, with their value tied to a custodian holding an equivalent amount of USD. This centralization contrasts with the decentralized ethos of cryptocurrencies and could pose a threat to the crypto ecosystem.

Meanwhile, the Ethereum ecosystem is witnessing the rise of Decentralized Finance (DeFi), largely due to DAI, a decentralized stablecoin by Maker DAO. DAI maintains its value without a centralized custodian, instead relying on complex algorithms and Ethereum as collateral. DAI is becoming the preferred medium in the DeFi world, fostering a secure ecosystem of decentralized applications (DApps).

In conclusion, while Bitcoin is a volatile store of value, DAI offers stability and security, making Ethereum, not Bitcoin, a more likely candidate for the role of a medium of exchange in the blockchain world.

Digital Gold Theory:

Bitcoin, often referred to as digital gold, has been the primary cryptocurrency exchangeable for USD, with altcoins' values typically calculated using Bitcoin's price. However, with the rise of Ethereum and its exchangeability with USD, this dynamic is changing.

Gold's value, unlike Bitcoin, is not solely based on scarcity but also on its wide range of industrial uses, including in dentistry, computer parts, data transferring cables, medicine, real estate, space vehicles, and jewelry, among others. Gold's value is thus determined by the demand for these uses against its supply, which continually increases due to mining and laboratory production.

Bitcoin, on the other hand, can only be held or transferred, with no industrial or service usage. Ethereum, however, shares similarities with gold in that it has intrinsic value beyond being exchangeable currency. Ethereum serves as the fuel for running smart contracts, decentralized applications, fungible and non-fungible tokens, stable coins, and Decentralized Autonomous Organizations (DAOs).

Much like gold is used as a semi-conductor metal to run our computers, Ethereum is used to run applications. These applications range from decentralized finance (DeFi) applications, digital items/collectibles, gambling and games, industrial tracking, and even semi-decentralized applications.

In conclusion, Ethereum's market cap, like gold's value, can be calculated based on its usage and demand against its supply, making it a more tangible asset than Bitcoin. (Remember this article was before EIP 1559).

The Mith of BTC fixed supply:

Bitcoin maximalists argue that Bitcoin's intrinsic value lies in its fixed supply, likening it to the scarcity of gold. However, this comparison is flawed as gold's value is also tied to its diverse industrial uses, while Bitcoin's value is more akin to a collectible object, driven by its mining and fixed supply.

The notion of Bitcoin's fixed supply of 21 million coins is not absolute. The Bitcoin protocol can be changed by community consensus, potentially altering the supply. For instance, with the introduction of the Lightning Network, discussions have started within the community about increasing Bitcoin's supply. The concern is that as block rewards halve every four years and on-chain transaction volume decreases with the Lightning Network's adoption, miners may lack sufficient incentive to secure the network, making it vulnerable to attacks.

Thus, while Bitcoin is often touted for its non-manipulable fixed supply, the reality is that its supply can be changed by community consensus, challenging the perception of Bitcoin's fixed supply.

The Dark Side of the BTC core community:

Bitcoin's community is currently focused on maintaining hype and price, with companies like Blockstream leading development in a way that some critics liken to a centralized organization rather than a decentralized community.

The Lightning Network (LN), a state channel on top of Bitcoin, is a prime example of this trend. State channels, which are also present in Ethereum through projects like Raiden Network, allow for off-chain transactions between participants, with only the opening and closing of the channel being recorded on-chain. While this can facilitate faster transactions, it also means that transactions within the channel are not stored on-chain, leading to trust issues.

Despite heavy promotion, the LN has not gained significant traction, with only 850 BTC stored in it, a number that is decreasing. In contrast, Wrapped Bitcoin (WBTC), which is Bitcoin wrapped to become an ERC20 token on Ethereum to interact with the DeFi ecosystem, is growing rapidly.

2019 DATA from DeFi Pulse:

The DeFi ecosystem on Ethereum, with more than 2 million ETH locked, dwarfs the LN, indicating that users trust it more despite its less aggressive advertising. Critics argue that the LN's approach removes too many layers of security and trustless features, making it a less attractive option.

2019 DATA from DeFi Pulse:

Another point of contention within the Bitcoin community was the block size debate. While Bitcoin maximalists and developers often treat Satoshi Nakamoto's words as sacrosanct, they have been willing to censor ideas that go against the vision of Blockstream and the LN, such as colored coins, smart contracts, and especially the block size increase, now known as Bitcoin Cash.

After this point, I stopped writing at the time because I was focused 100% on DFOhub, BTW, I encourage all readers to go here to read the complete research and any associated link.

BUT NOW, Let’s take a time machine and come back to 2023 because now it’s evident more than ever that the flippening is near and is already happening.

Brace yourself; it’ll be sooner than you can ever expect!


Now it is 2023, and we have a looooooooooot of data! Actually, I even feel like a 🤡 writing this article, because for me the flippening is the most secure thing in life after death. But this is what you voted for, so let’s respect democracy to my followers:

Let's delve into this topic with an analytical lens!

Three key metrics stand out when discussing the flippening argument:

Daily Fees: A network's true worth is reflected in the daily fees users willingly pay for its services. Relying on active wallet counts? That might not give the full picture. Many individuals possess several wallets. It's crucial to note that web3 prioritizes financial transactions over mere user counts and data sales. The traditional web2 approach to user adoption isn't quite apt for the web3 era.

TVL: Total Value Locked shines a light on the genuine value of a crypto network. It underscores the confidence and trust that both individual users and major institutions vest in the network.

Inflation: In assessing the credibility and enduring value of BTC and ETH from an asset perspective, the inflation rate emerges as a pivotal factor.

Daily Fees

The first fundamental metric to consider is transaction fees paid by users to use the network, this data is very important to consider as the request for ETH (Red) and BTC (Black):

Ethereum has truly been on a tear since 2020, riding the wave of the DeFi explosion! It hit a staggering ATH of $73M in daily fees, dwarfing BTC's peak of $14M back in January 2018, amidst the fallout from the 2017 bull run.

So, why is this data significant? It's not merely a reflection of the costliness of a blockchain, especially since many Ethereum transactions are facilitated on Layer 2 solutions like Optimism and Arbitrum. Rather, this data underscores the value users place on a network. It highlights the premium people are prepared to pay to leverage a particular network as the foundational layer for their financial operations.


Let's dive into another crucial metric, and hats off to DeFI Lama for their stellar insights! 🚀❤️ We're talking about TVL (Total Value Locked). Why does this matter? TVL is a testament to the amount of value a blockchain safeguards. In essence, this metric reveals how Ethereum (represented in green) is fundamentally undervalued when juxtaposed with Bitcoin (depicted in blue):

If Fees looked like smashing data for ETH, TVL is even more and more devastating for our old, slow BTC. Yes, it’s represented by that kinda invisible blue line.

Ethereum's ATH soared to an astounding $105B. In stark contrast, BTC's ATH lingers at a mere $200M. Post-2021, even on its most lackluster days, Ethereum's TVL outpaces BTC's by a staggering 220-fold.


Inflation, that pesky little number everyone's chatting about, is becoming the uninvited guest in the FIAT currency party. It's like a stain on your favorite shirt that politicians just can't seem to wash out, and it's giving real-world countries a bad rep. Think of inflation as the 'limited edition' tag on my old boxers; it's not just about scarcity, but about value. People use it as their go-to yardstick when sizing up 'similar' assets, is not about only inflation, but about inflation, deflation and underline value of the asset and the important it plays in our society and economy.

Now, let's talk Ethereum. In recent years, it's gone through a glow-up with two major updates, turning it into a never-before-seen superstar asset. First up, ERC1559: in layman's terms, the busier the Ethereum network gets, the more ETH are burned.

Learn more about it here:

The second update was the Merge, which shifted from POW (Proof Of Waste) - and for those new to crypto, POW is what BTC currently uses. In simple terms, the more energy and computational power you burn, the costlier it becomes, creating deterrents for potential attackers. We'll dive deeper into its long-term viability later.

Now, ETH operates on an advanced version of POS (Proof Of Stake). This eliminates the hefty inflation tied to massive miner expenses. It's a greener, more cost-effective system in terms of inflation. Here, network validators earn by putting their staked $ETH on the line, rather than splurging on electricity and hardware.

Learn more about it here:

In the BTC (Orange) vs. ETH (Blue) showdown, inflation emerges as a pivotal metric. Here's the current state of play between these two crypto giants:

Examining ETH's inflation trends pre-merge and post-ERC1559 introduction (as depicted on the left metric), it's evident that during the bull market phase, ETH and BTC ran neck-and-neck in terms of inflation. Yet, when the bear market hit, ETH's inflation surged, primarily due to the hefty costs (inflation-wise) of compensating POW miners. Switching gears to the right metric, even amidst a bear market with subdued chain activity, POS ETH's performance is nothing short of remarkable when juxtaposed with BTC. As it stands, ETH's rate clocks in at a deflationary -0.2%/y, while BTC lingers at an inflationary +1.7%/y. This suggests that even in quieter times, ETH's economic dynamics are giving BTC's inflation rate a run for its money. The potential for the upcoming bull market? It's tantalizing to even ponder!

Network Value (Lets play a game)

Using Fees Paid, TVL, and Inflation as metrics, let's delve into a formula that, from my perspective, can encapsulate the Network Value (N.V.).

For Fees Paid, 0% equates to $0 and 100% aligns with $73M (The ATH)

For TVL, 0% equates to $0 and 100% aligns with $105B (The ATH) For Inflation, using the current annual rates

For Inflation (Current annual rate), 0% corresponds to 4% (approximate USD inflation in 2023 cumulatively) and 100% equates to 0%

BTC NV average score is 22.15% (20% for Fees Paid, 0.4545% for TVL, Roughly 46% for inflation)

ETH NV average score is 106.66% (100% for Fees Paid, 100% for TVL, 120% for inflation)

By this metric, Ethereum's market cap should be a whopping 4.8 times that of BTC.

Now, a word of caution: don't take this to the bank. It's a playful exercise, not financial counsel, and it's a broad-brush approach. This calculation doesn't factor in decentralization, even though the industry's focus on it seems to have waned over the past 3-4 years. But the idea of an Ethereum that's five times mightier than BTC? It doesn't seem too far-fetched to me.

The Demand

Evaluating the utility of BTC and ETH is straightforward when we consider Fees paid and TVL. In this context, TVL acts as a guarantee for sustained future use. The logic is simple: the more assets held in the network, the more people will engage with it to manage and utilize those funds. Concurrently, higher user fees indicate a more secure network, as they incentivize more "validators" or "miners" to uphold it.

Fast forward to 2023, Ethereum boasts a sophisticated ecosystem of DeFi applications, corporate integrations, billions in institutional and VC investments, regulated stablecoins, financial assets, user-friendly interfaces, and a thriving community of artists, brands, and games using it as their foundational layer. BTC, in contrast, offers... well, Ordinals. Essentially, NFTs with a whopping $51B in fees just to store image files on-chain. Some BTC advocates equate its Market Cap to TVL, but that's a slippery slope. It's akin to valuing a company based solely on its stock holdings, which is naive at best and eerily Ponzi-like at worst.

Ethereum is becoming indispensable, not just for individuals but also for businesses and investment funds. This widespread adoption solidifies its value and utility. BTC, however, seems to have a singular purpose: buy, hodl, and hope for a higher selling price. While some champion BTC as a hedge against inflation, that's not a unique BTC trait. ETH offers the same, arguably in a superior manner. Asset value isn't solely determined by inflation; demand plays a pivotal role. And when it comes to genuine demand, Ethereum seems to have a more concrete footing than Bitcoin.

The 🐘 in the 🚪 “PRESSURE”

Market pressure is indeed a pivotal financial and economic factor. BTC miners, with their real-world overheads like hardware and electricity, are in a perpetual cycle of selling the BTC they mine to cover these costs. This creates an unending downward pressure on the market. It's like the entire crypto realm is in a constant tug-of-war, trying to counterbalance the weight of BTC's inflationary push. the crypto space with BTC as a market maker is constantly swimming against the current like this:

You can visualize the comparison between BTC production costs and Miners selling pressure:

You can also find very cool metric to calculate the correlation between miners costs and market pressure here:

On the flip side, Ethereum's POS system flips this narrative. The deterrents for validators behaving maliciously aren't rooted in tangible costs like electricity or hardware. Instead, it's about putting their ETH capital at stake. Ethereum validators aren't under the same compulsion to offload their earnings. In fact, they're nudged towards re-staking their rewards, fostering a distinct inflationary dynamic. The market pressure exerted by ETH's inflation can be visualized differently:

If you are a newbie in how the Ethereum economic machine works, I highly recommend this article from Bankless:

The new yield era few people talk about

With the introduction of the EIP1559 burn mechanism, which is contingent on the natural activity of the network, $ETH gets incinerated every block. This has already transitioned it into an inflationary asset. This implies that even during periods of subdued network activity, the returns for Ethereum validators aren't derived from the inflation of the asset. Instead, they come from an asset that's highly likely to either retain its supply or even undergo deflation.

Now, if some are drawing parallels between BTC and gold (a comparison I've openly challenged, as highlighted in my 2019 research), then where does Ethereum stand? Do we have an asset in our current world that promises a sustainable yield (security budget) while boasting a deflationary market supply?

Absolutely, Ethereum's uniqueness stems from its decentralized nature and the trust it embodies. Traditional assets, like housing, are deeply intertwined with political decisions, local economic health, and the inflationary tendencies of fiat currencies. Dividends from companies, on the other hand, are a reflection of managerial competence and the company's ability to turn a profit. Bonds, while sometimes touted as being uncorrelated to inflation, often end up being influenced by it, especially in our current economic climate.

Ethereum, however, operates on a different plane. Its value and yield aren't just about market dynamics but are rooted in the trust and security of its decentralized system. It's not subject to the whims of political decisions, nor is it tied to the performance of a management team. Instead, it's a manifestation of collective trust in a system that operates transparently and autonomously. This makes Ethereum not just another asset but a revolutionary one, challenging traditional notions of value and trust.

Let’s show me in the comment what’s your position representing ETH as an asset perspective.


POW is a very inefficient way to validate blocks, it’s very cost effective and it’s needs not just an incredible amount of security budget dumped to holders (aka inflation aka rewards per block), but also its bad for the environment, using the amount of energy needed to three million households and 10,000,000 tones of Co2/y only in US operations From NY Times

POW is also criticized in a recent paper from Humoud Alsabah (Kuwait University) and Agostino Capponi (Columbia University) about how the POW system mining led to a long term centralization, based on the competitive soul and higher growth of barrier to entry for newcomers:

POS is surprisingly efficient and enchain security, reducing the rush of hardware and expenditure to more elegant stake risk that let anyone to run a node and also be anon in this, FYI I don’t know how POW mining farm can be anon, the more they’re big the more they’ll be always subjected to countries regulations, POS validators in the other hands, they can just be everywhere with a cheap computerconnected to the internet.

Both POS and POW are not perfect, but Ethereum POS have by any means less chance of centralization or corporate/countries dominance than the BTC POW.


I’ll argue this section with just one meme:

In 2023 a small portion of the BTC community started to building some new sexy tech on it, Artefact and Ordinals are very interesting researches, but the lead of BTC is still in the hands of maxis and Blockstream, so I see a fork like BCH more lickley than a discussion there.


Ok Toschi, but the market say that BTC is still the leader! Five years that you argue about the flippening, but…

That’s a trillion dollar question

Peter Thiel: “A true bubble is when something is overvalued and intensely believed”

The culture of BTC now is very correlated on ETFs, countries who adopt it, Billionairse who buy it and people who hold it. One day in the Ethereum ecosystem is like 3 years in the BTC community.

The arguments in the BTC events are cringy than ever before:

The core community often dismisses arguments that don't align with the "get rich together" narrative or criticisms of the US economy. Even prominent figures like Udi Wertheimer, who contribute to the network, face significant criticism.

The "flippening" – Ethereum surpassing Bitcoin in market cap – may be catalyzed once the market rids itself of questionable players like USDT and Binance, who are believed to manipulate the industry's broader landscape. It's crucial to note that about 90% of the industry's volume is on unaudited offshore centralized exchanges, with 70% coming from an unaudited, unregulated offshore "Stable Coin." Given these factors, the current market data may not be entirely reliable or sustainable. The industry's future, especially when more regulated and transparent, will be intriguing to observe.

From Beeple:

We’ll talk about USDT Black Swan in another article!

The Ethereum vs Bitcoin to me in 2023 looks like the Science vs Church dilemma, I bet in science!

Ready to dive into the future? Discover how the industry transforms after the flippening here👇

🔮 Follow me at @baseToschi on 𝕏

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