While Bitcoin is currently on everyone’s lips and is making headline after headline, many are wondering whether other cryptocurrencies are just simple copies of the crypto veteran. At first glance, Ethereum is similar to Bitcoin in the sense that both are cryptocurrencies – i.e. not centrally issued, digital currencies. Another similarity between the two is that they are based on the principle of proof-of-work consensus. Despite small hurdles, the acceptance of Bitcoin and Ethereum by companies is increasing. Not only world brands like Tesla, PayPal and MasterCard trust in crypto currencies, also European online casinos like https://rabona.com/de/games/slots are following suit.
On average, Ethereum is slightly faster than Bitcoin: On average, 10-15 transactions are processed per second, while Bitcoin can only verify 3-5. At the moment this applies to the currently available version of Ethereum. One of the big expectations and hopes in the market is the upcoming 2.0 upgrade. Experts speak of a milestone in the field of crypto currencies, which among other things will enable faster transactions. This raises hopes in various industries.
What are smart contracts?
An essential point that separates Ethereum from Bitcoin are the so-called “Smart Contracts” – this term is most closely associated with the Ethereum blockchain. These smart contracts are digital contracts that enable a variety of applications.
It is more than relevant to mention the beacon chain, with which all of the available functions of Ethereum can be expanded. The beacon chain uses a proof-of-stake consensus algorithm instead of proof-of-work, which means that Ethereum primarily uses tokens instead of traditional computing power to process system-wide transactions.
Higher Ethereum transaction speeds through updates
Beacon chain is divided into so-called shardchains, which are smaller groups of nodes that process their own parts of transactions in parallel without having to reach a consensus over the entire Ethereum network. The aim of this is to improve the scalability of Ethereum and significantly accelerate the throughput rate. It is expected that this will allow the throughput rate of Ethereum 2.0 to reach up to 15,000 transactions in a single second. This upgrade allows Ethereum a much higher speed of transaction processing, which is able to keep up with any classic centralized payment system.\
The connection between BTC and ETH
In terms of price stability, it is clear that Bitcoin has a gigantic lead over Ethereum. The BTC rate is a relevant point that affects the whole picture of the cryptocurrency market. Both cryptocurrencies are positively correlated – if Bitcoin rises or falls, roughly the same thing happens with Ethereum. Bitcoin currently has a four times higher market capitalization; therefore it is less unstable in its volatility.
Outlook on the digital future of BTC and ETH
As for trading the two assets, it has been observed that the total trading volume of ETH / USD increased by a whopping 20 percent last year. In comparison, BTC / USD is up 47.5 percent. It seems understandable that this could be a psychological move for the user – at first glance, Bitcoins are too “expensive” to be used with typical trading strategies. For many, BTC just became too risky to trade with. This effect causes Ethereum to follow the price fluctuations of Bitcoin less and less than before.
Awais Dar
Founder of https://www.ebzpro.com/ & https://www.rankertimes.com/
Awais is passionate about writing about health, technology, education, finance, as well as business fundamentals and a little bit about the Igaming industry. He has 10 years of experience creating great and useful content to convey ideas / knowledge to people.
