Ethereum (ETH) currently the number 2 coin behind Bitcoin (BTC).
ETH 2.0 could soon be a serious challenge to Bitcoin. Bitcoin advocates have always considered BTC the most significant digital currency ever created. Nevertheless, Ether has rapidly achieved fame behind bitcoin. New investors seem to be joining the Ethereum bandwagon mostly.
This is since they essentially believe they missed the ride on Bitcoin. And since Ethereum is inexpensive, they could make more from it.
Bitcoin stays to be much higher in terms of price. But in terms of gains, Ether has surpassed bitcoin gains. Bitcoin rose 245% in one year. At the same time, Ethereum rose 730% in the same period. Almost thrice the progress of Bitcoin. This has driven investors to want to put more money in Ethereum. We are hoping that they will get more earnings on the coin. Bitcoin still is number 1 in terms of market capitalization. It is at present slightly more than a $1 trillion market cap.
But when you eliminate money and power dynamics, Bitcoin falls short.
Blockchain Battle: Ethereum Vs. Bitcoin
Shoulder to shoulder comparisons of the two blockchains shows significant differences. The Bitcoin blockchain is a database of accounts. A ledger, if you will. In comparison, Ethereum is much more sophisticated.
Things that are possible with Ethereum are just not possible with Bitcoin.
The Ethereum blockchain can store computer code.
An excellent example of these things is smart contracts. A smart contract is 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 shift 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 energy for mining than Bitcoin.
This could mean a bit move from Bitcoin mining.
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.
So, focus has 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. In addition, the new network would significantly reduce network congestion. Reduced network congestion means decreasing fees.
High fees have always been a massive 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.
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