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When Vitalik Buterin launched the “Ethereum” project in 2015, he was probably not entirely clear at the time about how the platform would develop. Today, Ethereum is number two in the crypto universe behind Bitcoin and the go-to platform when it comes to smart contracts and DeFi.
Bitcoin vs Ethereum, who is better?
Comparing Bitcoin and Ethereum is a bit like comparing apples to oranges, even though they are both decentralized assets. Bitcoin was actually configured exclusively as a means of payment. The BTC is either used for payments (although the options here are quite limited) or the coin is used as an investment. However, with Bitcoin Ordinals there is a protocol that makes it possible to create NFTs on the Bitcoin blockchain. To do this, Ordinals uses Satoshis, the smallest unit in the Bitcoin protocol. The ETH platform now serves as the basis for countless crypto projects. There are dApps, smart contracts and of course NFTs that originated on the Ethereum blockchain.
The difference in consensus mechanism
Another big difference between the two blockchains is the consensus mechanism that both use to verify transactions. Bitcoin uses proof-of-stake consensus mechanism, which also serves to create new BTC (keyword: Bitcoin halving). To do this, the miners have to solve complicated, algorithmic calculation problems. The first person to do this will be able to add a new block to the blockchain and will receive BTC as a reward in return. However, mining does not have the best reputation when it comes to power consumption. The electricity requirements of data centers are high and they are often not located in countries that are known for sustainable electricity generation. In addition, the threads of mining are now run by a few large players, which probably doesn’t quite correspond to what Satoshi Nakamoto had in mind when he invented Bitcoin. By the way, ETH will also use the PoW consensus mechanism until 2022. With “The Merge”, however, the system was switched to the proof-of-stake consensus mechanism. With PoS, transactions are authorized by stakers locking their coins in the staking contract. A user is then randomly selected who can verify transactions and insert a block into the blockchain. In return, they then receive ETH as a reward. By switching to PoS, Ethereum has enormously reduced its power consumption.
Ethereum or ETH?
Can Ethereum beat Bitcoin?
Making an accurate price forecast for Ethereum would be like looking into the crystal ball. Cryptocurrencies are extremely volatile and are subject to strong price fluctuations. Making an accurate forecast is almost impossible. Whether and when ETH can ever beat BTC is anyone’s guess – but the potential is definitely there.
From a purely technical perspective, the Bitcoin blockchain is old news and has very limited utility as a means of payment. The possibilities of Ethereum are more diverse. However, the blockchain has major and, above all, strong competition with Solana and Cardano. Nevertheless, it cannot be ruled out that ETH will overtake BTC at some point.