Ethereum was launched in July 2015 to introduce the second-largest cryptocurrency globally and possess the potential to meet future needs with its unique invention of ‘smart contracts.’ Bitcoin may have laid the foundations of all cryptocurrencies that have developed yet. Still, Ethereum’s smart contracts have established such a platform that will shift the basic protocols of all future cryptocurrencies from Bitcoin to Ethereum. But exactly why will that happen, that’s what we are about to find out!
Edge of ETH over Bitcoin
Before you think about converting, let’s understand the advantage Ethereum has over Bitcoin. Ethereumfeatures smart contracts, the Ethereum Virtual Machine (EVM), use Ether for peer-to-peer contracts. Ethereum’s smart contracts use blockchain-based applications for contract negotiation and facilitation. The edge of these contracts is that the blockchain provides a decentralized way to verify and enforce them. The decentralized aspect makes it incredibly difficult for fraud or censorship of contracts. Ethereum’s smart contracts aim to provide greater security than traditional contracts and bring down the associated costs.
Ether, Ethereum’s blockchain-based cryptocurrency, powers the smart contract applications. All crypto assets, including Ether, can be stored in an Ethereum wallet, which allows you to create and use smart contracts.
The solution to shortcomings of Bitcoin
Ethereum’s supply style is inflationary in nature, and more tokens can be made over time, much like fiat currency. The supply cap is, however, limited to 18 million every year. But Bitcoin’s supply style is deflationary in nature as only a finite number of bitcoin can be made over time, i.e., 21 million in total. Thus, Ethereum is future proof to run down the fiat currency.
Block time of Ethereum is every 10 to 20 seconds, thanks to its GHOST protocol, as compared to 10 minutes in the case of Bitcoin. It means Ethereum can cope with the increasing demand for crypto with much ease and more flexibility.
The reward for mining Bitcoin halves about every four years, and it is currently valued at 12.5 bitcoins—Ethereum rewards miners based on its proof-of-work algorithm called Ethash, with 5 Ether given for each block. Ethash is a memory-hard hashing algorithm that encourages decentralized mining by individuals rather than using more centralized ASICs as with Bitcoin.
Future of Ethereum
Modern business solutions offered by Ethereum are very likely to attract more customers to buy Ethereum.
Ethereum gives developers a means to raise funds for their own startup. For their new project, they can set up a contract and seek pledges from the community. The money that is raised will be held until the goal is reached or until an agreed-upon date. The funds will be released back to the contributors if the goal is not met or go on to the project if it is successful.
They can collect proposals from the people who backed your project and then hold votes on how you should proceed—the result is the savings of expense of a traditional structure, such as hiring managers and doing paperwork. Ethereum protects your project from malicious activities, while its decentralized network means that you won’t face downtime.
Ethereum stands next to the crypto giant Bitcoin and all the modern business solutions it offers; Ethereumm’snot in anyone’s guess. Being a non-regulated platform, it still faces a lack of trust from the common public at large. However, given the current scenario of its increasing number of transactions, its popularity and price is going nowhere but up shortly.