Why Ethereum Over Bitcoin
Updated: Dec 19, 2019
With increasing interest in digital payments, people often ask themselves which one is the best to hold as a better token. Of course Bitcoin is the most popular, but there are many others. Currently there are over 2,000 cryptocurrencies and that number is growing. For this entry, we’re just going to focus on only comparing two – Bitcoin and Ether, the first two in the industry at the time of writing this article.
First a brief note about their similarities. Both are open-source, virtual commodities with no inherent physical representation. The transactions for both work through software with built-in security that manages a public blockchain. The value of both have seen wild fluctuations.
A few differences - Bitcoin was established with a set number of issued “coins”. Bitcoin offers 21 million coins. But there is no cap on Ethereum, it expands according to demand. (1) Although more coins can be created or “mined” through various means. Those are the basics. Now let’s delve a little deeper to find differences.
The administering software behind both currencies is the main difference. Both were developed with different purposes in mind.
Bitcoin was established to make payments easier and free from official oversight. It’s purpose is simple – to create an alternative payment system. It was designed to make it easier for anyone to buy, hold, and trade contracts without needing a bank or government to regulate or guarantee its validity.
Unlike Bitcoin, not only does it sound smarter, but trades in Ether are generated via a software platform called Ethereum (ERC20). That platform uses what’s called a Smart Contract – a transaction that can be programmed to invest, spend or save depending on certain criteria. So transactions on the Ethereum platform can act independently once specific conditions are met. It transacts through a network of computers without the need for a third party to facilitate the trade like a financial institution or lawyer. Ether is being embraced by the institutions and corporations (For example the Zether program).
Once set up, the Smart Contract must be submitted and administered through the Ethereum network that costs fee (gas), which generates Ether. As the network has grown with the demand for these Smart Contracts, the value of Ether has gone up.
The open-ended, decentralized nature of the platform is what makes Ether such an interesting contract. Currently, blockchain and Smart Contract technology is being used by many corporations for various purposes. And it’s full potential has yet to be realized. With so many possibilities waiting to be found, it’s easy to imagine tremendous growth in the world of Ethereum. The next technology revolution might be just around the corner...
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