What Is Ethereum and Is It Better Than Bitcoin?
By Space Coast Daily // April 27, 2022
Cryptocurrency and blockchain have turned this world upside down. Who would have thought that just two innovations could accelerate humanity’s movement towards a new era of technology so much? Today, Ethereum and Bitcoin are the two absolute leaders in the world in terms of capitalization.
Ethereum deservedly takes its second place after Bitcoin. After the launch of these two currencies, our everyday concepts of money began to change rapidly.
How Bitcoin Differs from Ethereum
What are the key differences between BTC and ETH?
Bitcoin is first and foremost a cryptocurrency. It has a limited range of use cases and is a digital asset for those looking for an alternative investment vehicle. The Bitcoin blockchain works on the Proof-of-Work (PoW) consensus algorithm, in which the success of miners depends on the power of their equipment. PoW is now considered an obsolete technology that is not well suited for money transfers – new projects, as a rule, do not use it.
Ethereum is already technically superior to Bitcoin. The speed of this network is 30 transactions per second, and thanks to second-layer solutions, the throughput can reach 2,000 – 4,000 transactions per second. Checking blocks takes 12 seconds, compared to 10 minutes for BTC.
Ethereum 1.0 also works on PoW. But the network is already actively transitioning to state 2.0. When it will operate based on PoS, there will be no mining, consensus will be reached by validators, and new coins will be mined through staking. The upgrade will increase the speed, efficiency, and scalability of the Ethereum network, as well as make Ethereum mining more environmentally friendly.
The technology has been so successful that it is already being used by major companies such as:
■ IBM, Lufthansa,
■ the international charitable organization UNICEF and others.
2. Status in the industry
Ethereum is the basis of blockchain products and, in principle, the foundation of the modern blockchain industry, while Bitcoin is an exchange-traded investment asset with limited supply and deflationary properties. In terms of investment attractiveness, these assets can be compared if we consider them as digital tokens, but in terms of their fundamental characteristics, these assets differ dramatically.
In the future, we should not expect any confrontations between Bitcoin and Ethereum in India since the main cryptocurrency has taken its niche as a “whipping boy” from the position of regulators and financial authorities, as it identifies the entire field of digital assets in its person.
Apart from you can buy cryptocurrency and exchange cryptocurrency on Changelly, BTC can be spent in many more places than ETH. It is accepted by some small- and medium-scale enterprises in the USA, as well as large companies such as Microsoft or Wikipedia. ETH can only be spent in a few places. However, these projects were created for completely different purposes.
As stated in numerous cryptocurrency overviews, Bitcoin and Ethereum were initially positioned as completely different projects from each other. Ethereum is more of a technology for building decentralized applications, while Bitcoin is a means for transferring and storing value. It makes no sense to treat them as competing products.
Ethereum has already confidently taken its place in the market, but other similar projects will appear that can compete with it. There are more and more other blockchains for creating decentralized applications since the creation of Vitalik Buterin is far from ideal.
At the moment, there are no such projects on the crypto market that could compete with Bitcoin. A similar project is Litecoin, but if Bitcoin is “digital gold”, then LTC is “digital silver”.
Significant changes have taken place in the Ethereum network in recent times. The London update has been released, which launched the token burning mechanism. Thanks to this, for the first time in the history of Ethereum, the altcoin emission has become negative. More digital coins were burned that day than new ones were issued.
At the same time, the deflationary model was built into the blockchain of the first cryptocurrency from the very beginning since the number of bitcoins is limited to 21 million (19 million have been mined at the moment). It is also worth considering the fact that about 20% of the bitcoins already mined are stored on wallets, the passwords to which have been irretrievably lost. This reduces the number of bitcoins in circulation.
As the crypto market matures, investors begin to pay more and more attention to altcoins and, when making investment decisions, evaluate the long-term potential of the project. Since ETH is much cheaper than BTC, it has a higher potential for price growth. Ethereum can become the basis for any technology on the blockchain, it has many use cases in the real economy. Bitcoin is unlikely to go beyond the store of value and remittances.