According to a well-known market expert, Ethereum has the potential to outperform Bitcoin and become the most important crypto asset. Vitalik Buterin’s creation hit a new all-time high of $ 2,614 yesterday, setting a light green mark as Bitcoin shifted into reverse during a period of momentum for alt-coins.
Bitcoin and Ethereum are the two most valuable cryptocurrencies in terms of total market capitalization. However, if you dig further, you’ll find that these two terms serve completely different functions.
What is bitcoin
In January 2009, an enigmatic person named Satoshi Nakamoto carried out a concept outlined in a white paper: a peer-to-peer electronic currency system that could function safely without the intervention of a central authority.
What is ethereum
The Ethereum blockchain is operated by ETH, which can be used to pay for computing services on the blockchain, among other things. Ethereum is the blockchain that Ether is built on, and a lot of people confuse the two. But you don’t call Ether “Ethereum” any more than you call Bitcoin “Blockchain”. Ethereum is a programming language as well as a distributed software platform. Developers create decentralized apps (dApps) and smart contracts on the platform. Ether, the home currency of the Ethereum platform, is used to fuel the platform in the same way that oil powers the world’s transportation networks.
Ethereum and Bitcoin have different goals
Bitcoin is the epitome of cryptocurrency philosophy and appeals to the libertarian spirit to remove the control of money supply by governments, central banks and monetary authorities. It is the top brand in the asset class and it is attracting the most attention from large investors because of its market cap, which offers the most liquidity. More information can be found here Trading platform.
Bitcoin works as a decentralized currency independently of the Federal Reserve or any other central bank and has a predetermined maximum supply. Bitcoin appeals to market participants who, for political reasons, are against money printing and other monetary policy measures that affect the general money supply in the financial system.
Additionally, Bitcoin’s success over the past 11 years has made it a hot commodity as nothing stimulates investment and trading like a raging bull market. Due to the limited amount of Bitcoin, there are only 21 million of them. Around 90% of the total supply of 18.6 million Bitcoins has already been mined.
The challenge of scalability
The intrinsic properties of Ethereum mining limit block generation to 7-15 transactions per second, which is a scaling problem. In comparison, the Visa network processes around 45,000 transactions per second. The requirement for each node to process every single transaction that occurs on the network is a major contributor to this limitation. As long as this problem is not resolved, a transaction overload can lead to long waiting times for Ethereum users. In order to be suitable for enterprise-class applications, the transaction processing speed of the Ethereum network must be increased massively.
More potential
“At this point, Ethereum arguably has greater potential for more real world applications, resulting in a larger ecosystem than Bitcoin,” noted Mr Peters. “We are currently developing several DeFi apps including Uniswap, MakerDAO and Chainlink, to name a few, as well as support for smart contracts and NFTs.
“Of course, some of Ethereum’s growth can be attributed to Bitcoin and the interest it has generated in crypto assets. With much more activity and user numbers expected for Ethereum due to the amount of apps built on it, I expect the overall value of the network to increase and the price of Ether to increase faster. “
Compare the two
Bitcoin accounts for about 72% of the total market value of all cryptocurrencies, with Ethereum accounting for 15%. Right now, this is essentially a two-horse race as other digital currencies like Cardano and Binance Coin are rapidly gaining ground on the market leaders.
Bitcoin was designed to do one thing well: to enable individuals to transfer values from one another without using a financial or payment intermediary. Bitcoin is widely regarded as a store of wealth and is often referred to as digital gold. There are currently 18.6 million Bitcoin in circulation, and only 21 million of these digital currencies are ever produced.
With Ethereum, the situation is a little different. Unlike Bitcoin, Ethereum has no hard cap, which means that the number of currencies in circulation is growing every year (there are currently 114.8 million in circulation); Still, annual ETH inflation will gradually tend towards zero each year as more coins come into circulation.
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