Ethereum currently is the number 2 coin behind bitcoin. Bitcoin maximalists have always believed bitcoin to the greatest digital coin ever made. And they may be right, for a while. Ethereum has quickly gained popularity behind bitcoin. New investors seem to be getting into Ethereum mostly.
This is mostly because they think they missed the boat on Bitcoin. And since Ethereum is cheaper, they could make more from it.
Related Reading | Athena To Install 1,500 Bitcoin ATMs In El Salvador
Bitcoin still remains much higher in terms of price. But in terms of gains, Ethereum has surpassed bitcoin gains. Bitcoin rose 245% in one year. While Ethereum rose 730% in the same time period. Almost thrice the gains of Bitcoin. This has led to investors wanting to put more money in Ethereum. Expecting that they will get more returns on the coin.
On market capitalization, Bitcoin still leads. It is currently a little over $1 trillion market cap.
But when you take out money and power dynamics, Bitcoin falls short.
Ethereum Blockchain Versus Bitcoin Blockchain
Side to side comparisons of the two blockchains shows the major differences. The Bitcoin blockchain is basically a database of accounts. A ledger if you will. While Ethereum is much more sophisticated.
Things that are possible with Ethereum are just not possible with Bitcoin.
Bitcoin price holding steady | Source: BTCUSDT on TradingView.com
The Ethereum blockchain is able to store computer code.
A good example of these things is smart contracts. A smart contract is basically an agreement written in code. Once the conditions set by both parties are met, the smart contract executes. This makes for smoother and faster transactions.
DeFi is another important application of the Ethereum blockchain. DeFi allows other applications and currencies to be built on the ETH network. This means that the network is programmable to do things other than its primary use cases.
ETH 2.0 Could Destabilize Bitcoin
With ETH 2.0 coming, a lot of things are going to change. The move from proof of work to proof of stake means Ethereum will use significantly less power. It is estimated that Ethereum mining will use 99% less power for mining than Bitcoin.
This could mean a bit move from Bitcoin mining.
Ethereum still under $2,000 | Source: ETHUSD on TradingView.com
The environmental impacts of crypto mining have been a hot topic in the world. Countries are trying to limit their emission numbers and are looking to cut down.
Related Reading | Is It Time To Sell Your Bitcoin? Jim Cramer Says It Is
So, eyes have been turned to Bitcoin mining. Which is purported to be one of the highest energy-consuming activities in the world. Using fossil fuel-based energy contributes the highest amount of greenhouse gases.
ETH 2.0 would also mean faster transactions. The new network would significantly reduce network congestion. Reduced network congestion means reduced fees.
High fees have always been a huge bottleneck in the bitcoin blockchain. This was meant to be resolved with the lightning network. But even that has had high fees related to high network congestion.
Featured image from Blockchain News, charts from TradingView.com