Currently, Bitcoin is the most popular and highest value cryptocurrency globally, while on the other hand, Ethereum is in “second place” under these same parameters (popularity and weight); however, many people wonder if Ethereum can at some point surpass Bitcoin and become the most suitable cryptocurrency globally. It is essential to analyze the main differences between these two cryptocurrencies since, in this way, their different strengths and weaknesses can be known, and how these characteristics can influence their future development.
Creators and decentralization
An “anonymous” programmer created Bitcoin in 2008 using the fictitious name of Satoshi Nakamoto. Bitcoin is the first of the cryptocurrencies, and it was the one that unveiled blockchain technology. Bitcoin does not have a visible founder and is not dependent on any organization, company, foundation, institution, or government. On the other hand, Ethereum was created in 2015 by Vitalik Buterin and other programmers as a decentralized platform for signing smart contracts, financial transactions, and the creation of tokens. Ethereum does not depend on any company, institution, or government; however, unlike Bitcoin, Ethereum has founders who can be identified and have some influence from the Ethereum foundation.
Although both cryptocurrencies have a decentralized decision-making system, at this point, we can see that Bitcoin has a slight advantage since not having identified people in its creation or foundation of the project provides it with greater autonomy and probability, that there are no future property rights claims or prevents “strong individual influences” in their direction or future decision-making, which strengthens the complete decentralization and autonomy of the system.
As mentioned in the previous point, by having more time in the market, Bitcoin has the advantage of being a “pioneer” in many aspects, especially in what corresponds to the legal part; In recent years, different laws and regulations have been presented that seek to implement, control, promote or recognize said cryptocurrency in some countries or states. One of the most important events on this issue was the official recognition of Bitcoin in El Salvador. In the case of Etherum, having less time in the market (7 years different from Bitcoin) has fewer laws and regulations that support or recognize it individually. At this point, the advantage is Bitcoin since it has more specific rules and regulations in force, making said cryptocurrency a benchmark in the legal field (focused on cryptocurrencies).
Consumption of energy resources
For the manufacture or creation of bitcoins (mining), we require powerful and expensive computing equipment, which leads to the consumption of many energy resources. On the other hand, in the case of Ethereum, to be created said cryptocurrency (Ether) or to carry out its mining process, only a standard computer is needed, which means lower consumption of energy resources and operating costs; at this point, Ethereum has a clear advantage since by consuming fewer energy resources; it is more ecological and sustainable in the future.
Number of units
Regarding the number of Bitcoin units, its production is limited to 21 million units, while in the case of Ethereum, the only limitation it has is that a person cannot produce more than 18,000 units per year (it is estimated that there are currently more than 112 million coins in circulation). In this regard, Bitcoin has the advantage since having a limited number of units generates greater trust in users, making its value higher since it becomes a “finite” or limited resource.
Other additional functions, diversification, and applications
Although both cryptocurrencies have different applications, in the case of Bitcoin, the system is based on its cryptocurrency, having a network in which its operations are “executed” regardless of the business for which it is used. On the other hand, Ethereum is a platform that operates thanks to a cryptocurrency (Ether) created to function as a kind of “fuel” that makes it possible for operations to be carried out within its network, besides having as its aim the development of its ecosystem; For example, this network is used for the production, creation, trade, and publication of applications, whose operations are based on smart contracts that are adjusted to the business that is carried out. At this point, the advantage is for Ethereum, since it has a more diversified platform and ecosystem; an obvious example of this is the rise of NFTS in the Ethereum network, although it is essential to note that a “collateral effect” of this demand has been increased commissions on your transactions.
In the case of Bitcoin, this cryptocurrency takes approximately 10 minutes to confirm an operation. In contrast, in the case of Ethereum, this confirmation is faster since it takes between 12 and 17 seconds around, this time difference between both cryptocurrencies, It has also influenced how they are used: while on the one hand, the times of Bitcoin may be more compatible to buy products or services of “high value” that do not require immediate confirmation (example cryptocurrencies such as safeguarding of assets or buying and selling of real estate), in the case of Ethereum, its compatibility is more related to the acquisition of products or services of confirmation and immediate delivery. At this point, the advantage is for Ethereum, since a higher speed in its transactions allows it to be easy to implement in daily commercial activities, such as buying and selling of mass or immediate consumer products.
Can Ethereum Outperform Bitcoin?
As we can see, both cryptocurrencies have their strengths and weaknesses, even complimenting each other in some aspects. We must take into account that due to its characteristics, each cryptocurrency faces its challenges to continue growing and be adopted massively or globally; we can conclude that if Bitcoin does not solve its problems of high energy consumption, speed of its operations, and reduced diversification of its ecosystem, and at the same time, Ethereum takes provisions to avoid issues related to its “unlimited” number of units or possible interventions by its founders, besides promoting the creation of new regulations or laws specialized in said cryptocurrency, then, at some point, Ethereum “could” surpass Bitcoin, however, if Bitcoin reduces its energy consumption and improve the speed of its transactions (in addition to continuing to develop in the legal issue) it will probably continue to lead the market.
What do you think about this topic? Do you believe that at some point, Ethereum will manage to surpass Bitcoin?
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