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Why we shouldn't even compare Bitcoin and Ethereum

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@behiver
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Bitcoin and Ethereum are undoubtedly the most popular cryptocurrencies in the world and some would say they are fighting for world domination. While Bitcoin's market cap is around $360 billion, Ethereum's market share is standing at $160 billion, which is quite a gap between the two assets. Regardless of that, there is also a flippening bet in between these cryptocurrencies which is pending for several years. And while there are maxis of both sides, the different purposes and particularities simply make them incomparable one to the other.

Let's take a look at the characteristics of both blockchains and cryptocurrencies and emphasize the different nature of each of them. Bitcoin was the first cryptocurrency known to the world which was invented by Satoshi Nakamoto in 2009. Based on blockchain technology, Bitcoin came to life as a decentralized payment alternative to the unlimited money/fiat supply through a hard cap in the code at 21M tokens. The facts that strengthen Bitcoin as a cryptocurrency are:

  • First cryptocurrency known to the world which started a financial revolution
  • Based on the Proof-of-Work protocol, it offers high decentralization and increased security
  • Scarce supply capped at 21M which should push its price to a higher level through mass adoption and demand
  • Not governed by any country, its value is set by a worldwide open market through supply and demand
  • Transactions are processed faster than fiat currency

There are also some weaker points when it comes to Bitcoin:

  • Has limited functionality being specialized as a digital currency
  • Its price is highly volatile moving the entire crypto market through a ripple effect
  • Energy intensive which affects global energy crisis and climate change

Ethereum was brought to the spotlight in 2013 when its white paper was published and officially launched in 2015. Being programmable, it expanded the sole purpose of a currency by offering financial services, games, and decentralized apps. The facts that strengthen Ethereum as a cryptocurrency are:

  • More than a digital asset through its programmable nature into decentralized apps
  • Based on the Proof-of-Stake protocol, it reduced energy consumption by 99.95%
  • Supply around 120M which became deflationary through EIP-1559 burning mechanics and PoS transition
  • One of the largest developer's communities in the world through its programming capabilities
  • Transactions are processed faster than on the Bitcoin network

There are also some weaker points when it comes to Ethereum:

  • Wasn't the first cryptocurrency on the market in order to capture a higher market share
  • For now the transaction fees are still higher than on Bitcoin
  • The PoS protocol is less decentralized compared to PoW

We saw that both Bitcoin and Ethereum have good and bad points and I think that they are progressing on their own paths. While they fight for market share in the crypto space, I think they complement each other through their different nature and purpose. While competition is good, so it is working together in order to fill up any demands of a changing financial world.

Posted Using LeoFinance Beta