Bitcoin is the world’s first decentralized currency and the leader of the cryptocurrency revolution. Legend says that the man behind it is Satoshi Nakamoto who conceptualized it in 2007. His idea is for a purely peer-to-peer version of electronic cash to the world in order to solve the problem of money being copied, providing a vital foundation for Bitcoin to grow legitimately.
Ethereum, on the other hand, is conceptualized by Vitalik Buterin in 2013. Like bitcoin, ethereum is also a decentralized platform and bitcoin’s strongest rival. It creates markets, store registries of debts or promises, move funds in accordance with instructions given long in the past like a will or a futures contract, all without a middle man or counter-party risk.
Nowadays, ethereum has become a popular instrument for trading and investment, taking away Bitcoin’s crown as the major “magic internet money.” The daily trading volume of ethereum is recently as similar as that of bitcoin.
In this article, we will explore and answer questions regarding ethereum’s advantage over bitcoin as the world’s leading cryptocurrency. Read on.
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Like Bitcoin, ethereum is built on a blockchain in which every transaction is recorded publicly. Aside from it being a virtual currency, it provides a way to create online markets and programmable transactions known as smart contracts.
The main advantage of ethereum over bitcoin is it’s a kind of a general platform that can solve problems in many industries using the most elegant solution to date. It also utilizes a different protocol that has performed impressively and has become really popular compared to bitcoin and other cryptocurrencies.
Scalability will become the most sought after public blockchain technology. With ethereum version 2.0, it would be able to handle as many TPS as with the Visa and American Express networks. IBM is also rumored to use ethereum as the backbone of the platforms of their Internet of Things. In that case, private and public blockchains will co-exist.
Moreover, law firms will begin to write smart contracts. These rules can be embedded into smart contracts with an automated collateral re-balancing system to ensure regulatory adherence and transparency.
And lastly, blockchain hype will not die. Governments will begin to realize the potential of blockchain technology. Linux Foundation’s Open-Ledger Project will begin to facilitate the evolution of blockchain technology. Banks will continue to file patents and build internally on blockchain technology.
Due to ethereum’s decentralized blockchain technology, it is now leading in the marketplace and could possibly surpass or equal bitcoin’s level.
A new bitsociety composed of autonomous corporations that operate on the blockchain without any central control will solely rely on ethereum. They will use ethereum to handle legal contracts and organizational bylaws in favor of having resources and funds autonomously, managed by a self-enforcing smart contract on a cryptographic blockchain.
Moreover, ethereum will be used to decentralize services like Uber or eBay, removing 3rd parties who collect fees. This will lead to reduced cost and fees.
However, ethereum could be more risky than bitcoin, due to it being new and the POS change coming. It’s not to say that bitcoin is not risky as well. It defines itself as a corporation, whereas ethereum is considered to be the project of an online creation community, not a corporation. But if the vision of ethereum’s developers and community fails, many people would lose their investment, for as much as $20 million in total, and law enforcement investigations may come up next.