Arguably the second-largest cryptocurrency, Ethereum seems to have more potential to beat all dominant Bitcoin. Suppose the recent fluctuations and significant declines in prices of the world’s most popular cryptocurrency, Bitcoin, are anything to go by. In that case, the rise in Ethereum is coming sooner than we expect.
A few months ago, Bitcoin prices went as high as $65,000, then had a massive fall to $30,000, signifying a fifty percent decline. This was mainly in May after Elon Musk, the CEO of the renowned Tesla, had reservations on the crypto. The coins market shares also saw a significant decline from seventy percent at the beginning of 2020 to 42% in recent months.
May also saw a significant decline in Ethereum prices by 11 percent, which is way lower than Bitcoin. In the past year, however, Bitcoin had an overall growth of 275 percent. On the other hand, Ethereum had a 900 percent growth rate, which strengthens our point that Eth may one day top Bitcoin.
Here is a detailed guide on why Ethereum may beat Bitcoin in the future.
Comparisons as a Currency
Verifying a transaction on the Bitcoin network takes approximately ten minutes. On the other hand, verifying the same on the Ethereum network takes ten seconds. Time taken to verify a transaction on Bitcoin is dependent on statistical variation, while the same for Ether is dependent on the gas reward added.
While the cost of mining Bitcoin is subject to the ever-fluctuating prices, Ethereum uses the gas concept where miners set the cost of computer power, making it more flexible and cheaper. Crypto is being adopted as one of the best payment methods by online casinos due to its security, convenience as well as anonymity of the players. However, Ethereum is preferred over Bitcoin due to its speed. There are also other modes of payments, and a complete guide is available on the site for interested players.
Ethereum Transition from Proof of Work to Proof of Stake
Present-day, Ethereum runs on a proof of work (PoW) model. It implies that you need first to solve very long and difficult puzzles to validate any transaction. The proof of work model is on the radar as it requires high levels of computer power, which critics argue has numerous negative environmental impacts. However, in the next year, Ethereum is set to shift to the proof of stake model. Here, your ability to validate a transaction is dependent on the number of coins you hold.
This implies that the energy required for the proof of work model will be significantly reduced. Ethereum’s protocol developer’s coordinator Tim Beiko seems confident of the proof of stake model, which he claims will have a 99% reduction in environmental impact.
Another notable disadvantage of the Proof of Work model is its susceptibility to cyber-attacks estimated at an all-time high of 51%. This is because it employs the approach that the most complex blockchain is the legitimate blockchain. This means a fraudster can easily write numerous blocks that can out-mine the remaining 49% of the network, giving them access to all coins in the world. On the other hand, the proof of stake model ensures that only people with many Ethereum coins have the power to mine. It also has an automatic lock-in mechanism where all false blocks are removed. This implies that the proof of stake model will lower energy consumption and transaction fees and increase the block time.
Smart Contracts
The enforcement of Smart Contracts on the Ethereum network could see a significant increase in the popularity of the crypto compared to Bitcoin. A smart contract is a digitally binding agreement with clearly outlined conditions such that a transaction is triggered only when met.
A literal example would be a person who has taken up an insurance policy for their child. The policy document will have several conditions to be met to receive the benefits. Some will dictate that you are eligible to receive full benefits after a certain period. You may also be required to state the beneficiary or next of kin. The thing is, the money will be disbursed if all the conditions on the policy document are met. This is how smart contracts work in a nutshell.
Some of the attributes of Smart contracts include the removal of intermediaries or third parties. Ethereum Smart contracts also exist on a public blockchain, making it very easy to track all transactions on the platform.
All these factors point out the possibility that Ethereum may beat Bitcoin in the future.
