I have a belief regarding cryptocurrencies. It's pretty simple. The cryptocurrency with the most developer interest and momentum will win. Developer interest in open source projects is a strong indicator of what becomes a standard online.
So I decided to take a peek at github, here's what I saw 11,200 repositories for bitcoin vs 3,563 for ethereum. for non technical folks - repositories are where developers are storing code for projects However, you have to note that Bitcoin was released in January 2009 and Ethereum was released in July 2015. Total volume isn't the best measure, let's take a look at the languages used.
For people who don't pay attention to development trends - one observation of high significance is Go popping up in the popularity list associated with Ethereum. Why is Go in particular an important sign? It's almost as fast and less clumsy compared to C++ and C Sharp. At the same time, it's relatively new. People who know Go are experienced and choosing to learn it because it is better. In my opinion, it will be the default backend language for most Silicon Valley tech companies in the next 5 years. Those same people are choosing to play around with Ethereum using Go.
Although there are a lot more repo's associated with Bitcoin (most likely due to its longevity) - there are 5k wikis on github for ethereum vs. 4k for bitcoin. So people are writing and contemplating about ethereum even though they haven't necessarily started projects involving it yet.
We've had splits in the technical community before. Two years ago, Angular was the dominant Javascript framework and React was new with a small following. Angular's community split between Angular 1 and 2. Today, there are 236,472 repo's associated with React compared 247,335 for both angular variants. Alone, interest in react is about to supercede both variants of Angular combined.
I believe the same thing will happen in the ether vs bitcoin competition. As bitcoin's split looms near, ethereum will reign supreme.
** Note I originally wrote this on June 1st, 2017 on LinkedIn but I think everything I said applies still
Below is an additional note with regards to portfolio allocation that I think is helpful that I wrote on November, 2017 on LinkedIn. Although I am more optimistic about ETH long term, I think ideal portfolio allocation right now is a combo of ETH + BTC:
My rule of thumb of Crypto portfolio allocation is a variation of the old stock/bond rule. 100 - (your age) = X % of crypto exposure in ETH. Put the remainder in BTC.
What about all the AltCoins and ICOs out there?
Zero AltCoins for "avg" investor. BTC and ETH are more likely to grow in value and in a more stable manner as they both have market leadership status. Fundamentally, cryptos are a winner take all market for specific use cases.
Zero ICOs for "avg" investor. ETH alone opens up enough indirect exposure to ICOs for the average passive investor.
If any ICO or group of ICOs takes off - ETH will grow concurrently but with less volatility and transaction costs relative to a portfolio of recent ICOs.
Does my rule of thumb apply to everyone? No.
It's simply a guideline that I think is beneficial relative to crypto portfolio constructions I have seen from novice investors that have had too much exposure to ICOs and Altcoins. IMO the ICO and Altcoin heavy portfolios have lower potential for returns and higher risk. A bad combination.
The Wall Street Journal (Oct 24, 2017) notes that less than 10% tokens have actual products (Coin Offerings Are Hot, but What Are They?). It’s generally a bad idea to invest in an ICO with no actual product and that’s the case for the vast majority of ICOs right now.
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Credits to this interesting web page: https://www.quora.com/Whats-the-best-cryptocurrency-to-invest-in-long-term-Why