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Ethereum: Why It Is Better than Bitcoin

Author: Rode Arteaga
13 January 2020, 10:29
Votes: 2

Ethereum or ETH is an open-source distributed computing platform that operates using blockchain technology and smart contracts. Ethereum is a bitcoin fork.

Ethereum: Why It Is Better than Bitcoin

This cryptocurrency is a kind of virtual machine that all network members can use on an equal basis.

The Emergence of Ethereum

2013 is the year when Ethereum was originally described by Vitalik Buterin in his research on the Bitcoin cryptocurrency. Soon afterwards, he published a technical document called Ethereum, where he described in detail the technical structure and rationale of the Ethereum protocol and the architecture of smart contracts. In January 2014, Vitalik officially announced the creation of the Ethereum cryptocurrency at the North American Bitcoin Conference in Miami.

In the same year, Buterin began working with Dr. Gavin Wood, who later became the Ethereum Foundation’s co-founder. By April 2014, Gavin published his study called “Ethereum Yellow Paper”, which has become the technical specification for the Ethereum virtual machine (EVM). According to the detailed descriptions of the document, Ethereum was implemented in seven programming languages ​​(Java, C ++, Haskell, Go, JavaScript, Python, Rust), which led to the general software improvement.

Ethereum Cryptocurrency Launch

In order to launch a new cryptocurrency, it was necessary to collect the resources and unite developers, miners, investors, and other interested parties. Tremendous efforts by the way. That is why the Ethereum developers have announced their intention to conduct an initial coin offering (ICO) of Ethereum cryptocurrency. The legal and financial difficulties of raising funds during presales led to the creation of several law firms, including the Stiftung Ethereum, established in June 2014 in Zug, Switzerland.

Read more: Most Profitable Cryptocurrencies for Mining in 2019

Ethereum Blockchain: Operational Principles and Prospects

Ethereum is the world’s second most popular cryptocurrency after Bitcoin, and its technical peculiarities are very interesting.

Ethereum Blockchain: Operational Principles and Prospects

Bitcoin was not just a new financial transaction system, but also a reflection of a new way of networking with the highest security level provided by a mathematical algorithm. That is how the world learned about the blockchain technology – a permanent list of data, the integrity of which is guaranteed by external modifications of mathematical data.

In turn, the Ethereum creators used the blockchain technology but were able to expand its functions by improving the reliability of financial operations, as well as providing automation of the process.

Blockchain guarantees transparent transactions by adding new conditions to the chain. This smart contract is using several lines of code written in Solidity, a special programming language. Theoretically, such smart contract can be written for any algorithm. This made it possible to conduct transactions without any agreements and paper documents, but with some limitations.

Ethereum Network Complexity  

Ethereum can be mined, but due to the network complexity, this process is rather difficult.  Its profitability is characterized by the amount of time required to validate one unit of the system.

At the time of creation, the Ethereum network complexity was 0.121 TH/s. In July 2019 this value was 3.2364 PH/s.

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Bitcoin and Ethereum: Which Cryptocurrency Will Survive

In fact, Bitcoin and Ethereum projects have a significant technical difference and different goals. Currently, Bitcoin is the most popular digital currency, and it is relatively stable. In turn, Ethereum aims to cover a much broader reach, because it is used in the smart contracts network.

It is impossible to answer unequivocally what cryptocurrency will survive. A number of factors such as legislation, the cryptocurrency market’s volatility, negative or, on the contrary, positive news can affect this. Even the best experts will not give a 100% forecast regarding the Ethereum or Bitcoin price.

Current Ethereum Rate

Current Ethereum Rate

This July, the average Ethereum price is $470, which is 2.25% less than it was in June.

The cryptocurrency rate changes regularly. Ethereum price, like the one of any other digital currency, directly depends on supply and demand. Making large investments, market participants can direct the rate in the right direction. A process of price growing is called a pump, or a dump – if it is going down. However, after sharp jumps the price, as a rule, returns to its former positions. Nevertheless, this does not prevent the Ethereum cryptocurrency from attracting new users.

Ethereum: Prospects and Forecast

While Bitcoin prospects are estimated by analyzing such parameters as the speed and magnitude of the commission, Ethereum requires consideration of slightly different characteristics. The first one is the success of blockchain startups running on this platform, and the second one is the speed of its direct competitors’ development (for example, the Cardano cryptocurrency).

However, Ethereum has an advantage in comparison with Bitcoin and other altcoins. The demand for this cryptocurrency is supported by a number of ICOs organized on the ERC20 protocol. ETH is the only currency that can be used for buying such tokens.

Read more: History of Blockchain

As for the specific forecasts for the current year, there are significantly fewer of them than for Bitcoin. A positive thing is that it eliminates the risk of excessive destructive information. However, it complicates the understanding of where the Ethereum price will go.

Many experts believe that the prospects for Ethereum have not yet been fully disclosed. For example, Apple co-founder Steve Wozniak is convinced that this blockchain platform can become as popular as his company.

“Ethereum interests me because it is a platform, which can be used for different purposes. In the long run, it can be as influential as Apple,” explains Wozniak.

Ethereum Rate Chart

Ethereum Rate Chart

3 years have passed since the cryptocurrency creation. From August 2015 to July 23, 2018, the Ethereum price changed significantly, which is reflected in the chart:

Interesting Fact

The biggest price jump occurred in 2017, when the Ethereum price rose 20 times.

As you can see, the Ethereum rate changes much more often and more rapidly than other cryptocurrencies. Investors are attracted by the prospects of increasing their capital in the short term.

Thus, the Ethereum cryptocurrency has every chance to maintain its leading positions among digital currencies in the next few years.

As mentioned earlier, the most famous and mysterious personality in the world of crypto technologies – Satoshi Nakamoto – has been announced as identified.

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