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Bitcoin, despite Wednesday’s crypto apocalypse, is still lording over the digital currency arena. It is a bit far behind Ethereum, though it slowly picked up the pace. It already broke the $3,000 barrier before this week’s crash. With that in mind, a lot from the crypto community has been musing – will it ever surpass BTC’s dominance?
Bitcoin v Ethereum
It’s undeniable that these virtual currencies have their similarities. Albeit these, there are still notable differences. Let’s cite this one as an example:
- Bitcoin’s goal was to create anonymous transactions and eventually eliminate the necessity of a third party to secure payments across the network.
- Ethereum, on the other hand, is actually a network itself despite being deemed by many as a cryptocurrency. As The Motley Fool explains, Ether is the term used for its currency. And this is used to buy commodities and services within the network. It noted that Ethereum allows its users to devise their own applications. And initiate what is described as “smart contracts” that automatically enforce the terms.
Another thing to consider is that well-known figures have favored Bitcoin. Twitter’s Jack Dorsey and even celebrities like Gwyneth Paltrow and Snoop Dogg are strong believers of BTC. Yes, you can argue that Elon Musk was also a fan, but after citing its environmental impact, you can say that he just sucker-punched the crypto straight where it hurts the most.
It’s all south for Ethereum on this part, no endorsements whatsoever. Looking into its co-creators (Vitalik Buterin) tale of the tape, however, he received the Thiel Fellowship (named after PayPal’s Peter Thiel) at age 20, way back in 2004.
This distinction is awarded to young individuals for the uninitiated to motivate them to pursue their interests other than attending college. Additionally, Buterin was recently hailed as the world’s youngest crypto billionaire.
The environmental impact of Bitcoin was mentioned above as it gobbles up huge amounts of energy to mine it. Ethereum is no exception to this. While miners are looking for greener ways to mine the former, the latter too has something under its sleeve.
Ethereum 2.0
The developers behind the Ethereum network are currently working on some improvements that tackle the issues within the network. As soon as it’s done, it will be dubbed Ethereum 2.0 (“Serenity”/” ETH 2″), IEEE Computer Society writes.
It highlighted the current proof-of-work process being utilized by both Bitcoin and Ethereum. Such a system is described as “terribly inefficient.” That’s the reason why Ethereum 2.0 will be transitioning from that to what is called a “proof-of-stake” system.
With this system, the node that keeps track of every transaction will now be chosen by an algorithm. This, alongside the chances of selection increasing with the amount of the currency the node’s owner holds. There will be a significant decrease in the cryptographic work’s complexity. That would also result in huge throughput gains for the entirety of the network.
Another feature within the said update is the introduction of “sharding,” which improves Ethereum’s efficiency and ability to scale. This will ease up the data verification tasks as they will be broken down among sets of nodes. And each of these nodes will be responsible for verifying the information it just received.
The Ethereum devs have also created an execution environment known as “eWASM.”
Currently, the network’s got this Ethereum Virtual Machine (EVM), though being widely used. “It remains something of an enigma even for people with a high degree of programming skills.”
By using eWASM instead of EVM, Ethereum 2.0 would make it possible to run the Ethereum app code on present-day browsers. Not to mention that it will allow programmers to use programming languages such as C, C+. And Rust to write codes that can run on the blockchain.
With all that’s been mentioned, it looks like Bitcoin needs to up its game as Ethereum now poses a huge threat to its dominance.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
