Ethereum’s Advantages Over Bitcoin

Ether is likened to a smartphone with many applications for users, while Bitcoin is described as a pocket digital computer and does not have many uses.

Facts and Figures about Ether

Ether is a coin built on Ethereum, an open source blockchain platform founded in 2013 by programmer Vitalik Buterin and many entrepreneurs in the field of virtual currencies. Many of these have joined the Bitcoin platform before. Currently, Ether (ETH), the world’s second largest virtual currency, is taking the attention of players away from Bitcoin. This coin just set a record when the ATH surpassed $4,800 for an ETH on Nov, 2021 assessing a value increase of more than 450% since the beginning of 2021. This number is not as shocking as Dogecoin’s 11,000% increase, but analysts say that ETH can become an important foundation for many areas in the future, instead of just a joke like virtual currency. shiba dog statue.

Ether advantages over Bitcoin

• Whereas the Bitcoin blockchain’s aim is to execute transactions and store currency, Ethereum is a platform that also facilitates the creation of new projects.

Currently, most NFTs are built on the Ethereum platform including the popular NFT Collection such as BAYC, Crypto Punks, Goblin Town WFT,… OpenSea is one of the largest platforms, allowing users to sell or buy NFT on it. From the latest announcement, OpenSea plans to exclusively support NFT based on the Proof-of-Stake version of the Ethereum blockchain after The Merge. Up to now, around $31 billion in NFTs linked to Ethereum have been traded on OpenSea, (according to The Block). This figure even “eclipses” NFT’s transaction volume on other blockchains – still undeniably the role of transactions underpinned by the current Proof-of-Work (PoW) version of ETH. 

• Ethereum’s decentralized, transparent system is powered by blockchain technology.

This is considered the main advantage of Ethereum. It is built on blockchain technology, which is basically a network of computers dedicated to recording virtual currency transactions. However, unlike Bitcoin, developers can build applications on this platform. “Ethereum is a blockchain with integrated programming language, which is also the most logical way to build a platform that can be used in many different applications,” Buterin said. The Ethereum network uses smart contracts (SCs), computer programs written in a programming language to execute existing instructions and operate on the blockchain. They are behind distributed applications (dapps), similar to applications running on Android or iOS, the difference is that they are not under the control of a single company or government. Activity on the Ethereum network has surged recently thanks to the popularity of NFTs (Non-fungible tokens), the token chain that represents items, and the use of blockchain technology. Many types of NFTs now run on Ethereum.

• Beyond digital money, the technology allows decentralized apps and smart contracts.

Buterin thinks that Bitcoin is too limited in terms of features. He compares it to a pocket digital computer that is capable of “doing a single task well”, while Ethereum is likened to a smartphone with a range of distinct applications for users. For comparison, Bitcoin is a payment network used to transact between two people anywhere in the world. Currently Bitcoin is mainly used as an investment asset. Meanwhile, Ethereum aims to build a completely independent virtual infrastructure, independent of any authority. One of the big trends in Ethereum right now is decentralized finance, which describes traditional financial products such as loans and mortgages using blockchain technology. In this case, the blockchain replaces the middleman like a bank and records everything in the network.

• The Ethereum platform is quicker than Bitcoin in processing transactions.

Possessing many advantages, but Ethereum is also not perfect. In 2017, the popularity of the game CryptoKitties caused a heavy congestion on the Ethereum network, slowing down transactions and causing game developers to increase service fees. Scalability is one of the biggest problems with Ethereum right now. It is operating in a proof-of-work (PoW) manner, similar to Bitcoin. This allows virtual currency miners to use computers to solve complex math problems to validate transactions, and has caused a lot of criticism when many people believe that the virtual currency network using PoW is consuming too much. energy.

Ethereum is preparing for an ambitious upgrade called Ethereum 2.0, in which the network will switch to a proof-of-stake (PoS) method, which relies on people who already hold virtual currency to process transactions new translation. Cryptocurrency investors believe that this upgrade will help the Ethereum network scale, process more transactions in less time, as well as support applications with millions of users. However, it can also lead to a dizzying escalation in the exchange value in a short time, as more and more ETH coins are hoarded in preparation for Ethereum 2.0. In theory, this would limit the supply of ETH. Some experts are still skeptical about virtual currencies like Bitcoin and Ether, referring to the virtual currency bubble that inflated in 2017 when each Bitcoin hit $20,000, before plunging to more than $3,000 a day later. five. This issue may change as professional investors pay more attention to cryptocurrencies.

• The developer community is one of the most extensive.

Following Ethereum is the cross-chain Layer-1 (also known as Layer-0) Polkadot, which will have 840 developers in 2020 and 1,400 in 2021. The number of developers flocking to the project is a lesser-known indicator for measuring project strength. While TVL indicates the amount of people who have invested in the blockchain project, developer contributions reveal information about the network’s architects and brains. In summary, TVL indicates demand, whereas developer headcount indicates supply. Because blockchains are open-source, code contributions and developer activities are open to the public.

• Ethereum just finished an update that lowered its carbon footprint by 99.95%.

Ethereum’s annual power consumption has dropped by more than 99.988%, from roughly 23 million megawatt-hours to just over 2,600. As a consequence, CO2 emissions are down 99.992%. According to Digiconomist, the Bitcoin network emits around 73 million tons of CO2 per year, which is equivalent to Turkmenistan’s emissions. According to data through September 2022, Ethereum created an estimated 35.4 million tons of CO2 emissions before decreasing to 0.01 million tons after switching to proof of work. The carbon footprint of the blockchain and cryptocurrency business, particularly Proof of Work networks, is being scrutinized more closely. Simultaneously, blockchain inventions like NFTs and decentralized finance have acquired prominence and large user bases.

The Merge is an astonishing technical effort by Ethereum’s core developers, a one-of-a-kind and sophisticated update made feasible by years of research and testing. It is the first time in history that an operational blockchain network has modified its consensus process while still in operation, lowering its carbon footprint considerably overnight. Furthermore, the Merge was completed in a method that was completely smooth for users, with no downtime.

Conclusion

Bitcoin is the most popular cryptocurrency, with the greatest commercial support. If you’re searching for a cryptocurrency alternative to fiat currency, bitcoin appears to be a solid option, as long as you’re willing to deal with volatility. Technically, Ethereum is more than just a cryptocurrency. The Ethereum network serves as a marketplace for users to purchase and trade decentralized apps and items. If you’re looking for more than just a cryptocurrency, Ethereum could be an excellent option.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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