Although both Ethereum (ETH) and Bitcoin (BTC) are cryptocurrencies, they do not compete directly in the same segment . Both use blockchain, the decentralized database technology, but Ethereum has additional layers to store more information , in addition to the balance available at each address.
Ethereum's goal is to be a platform to automatically run decentralized applications through a shared infrastructure. In this way it was possible to create programmable digital contracts (smart contracts), in addition to cryptographic ones (tokens), and the intention is that this technology will serve as the basis for decentralized applications, Web 3.0, and much more.
The native cryptocurrency of the Ethereum protocol is Ether (ETH), vice-leader in market capitalization. This ICO, or public offering of cryptocurrencies, raised USD 18 million in mid-2014, and currently has a market capitalization of more than USD 27 billion.
Will this multi-faceted platform be able to overcome the value of Bitcoin within a few years? We will explore the difference between both cryptocurrencies, the largest companies in the Ethereum ecosystem, in addition to their growth prospects.
Differences in the creation of Ethereum and Bitcoin
Bitcoin's proposal is the freedom to carry out transactions and maintain balances without the need for intermediaries. It is possible to develop applications using its blockchain, but its structure allows very little data beyond balances and addresses.
Bitcoin was born with well-established issuing rules , in addition to having no contact with the prior distribution of cryptocurrencies to investors, supporters or co-founders. In summary, Bitcoin is a protocol that aims to keep a single layer secure and solidified.
Ethereum wanted to go beyond the limitations imposed by the Bitcoin blockchain, and its creator, Vitalik Buterin, described in his whitepaper a model aimed at facilitating programming through a virtual machine (EVM). Ethereum's ultimate goal is to allow the execution of digital contracts, making room for Autonomous Decentralized Organizations (DAO).
The Ethereum network was born with 72 million coins previously mined , unlike Bitcoin. There was a company registered in Switzerland, Ethereum Switzerland GmbH (EthSuisse), responsible for the development and launch of the platform. Subsequently, the non-profit organization, Stiftung Ethereum, or the Ethereum Foundation was created.
Differences in the structure of Ethereum and Bitcoin
Both rely on Proof of Work (PoW) mining, although Ethereum uses the Ethash algorithm, while Bitcoin uses SHA-256. Both have specific mining devices called ASICs, however, it is still possible to mine Ethereum using video cards.
The average time between Ethereum blocks is 15 seconds , compared to Bitcoin's 10 minutes. At Ethereum there are no scheduled halvings, the reduction in the emission of coins found per block mined.
The storage of balances in Ethereum transactions is recorded in a separate structure , while Bitcoin works with Unspent Transactions (UTXO), which forces you to send the balance of each transaction back to the return address.
Another advantage of Ethereum is that the network can perform a check to see if the address used is valid. In contrast, in Bitcoin it is possible to create multi-signature wallets (MultiSig) on the network itself , while in Ethereum it is necessary to write your own digital contract (smart contract).
Largest companies in the Ethereum ecosystem
Compound: decentralized application of collateralized loans that accepts deposits from ETH, DAI, USDC, ZRX, among others; although it was launched by the company Compound Labs, currently holders of the COMP token, who are distributed among founders, more active users, company shareholders, and the like, are responsible for governance.
ConsenSys: development company controlled by an Ethereum co-founder, Joe Lubin. Created in 2014, it acts as an incubator for services and protocols; in 2019 they acquired all of Infura, the main data provider for decentralized applications at Ethereum; part of Consensys' focus is on using Ethereum technology in business applications, via private networks.
Enterprise Ethereum Alliance: after a cooperation agreement with Hyperledger, it became the largest open source blockchain initiative in the world. The non-profit organization seeks to support, train, build and promote corporate solutions based on Ethereum; its member list includes Accenture, American Express, Baidu, Bosch, CME, Santander, FedEx, IBM, Intel, Lenovo, JP Morgan, Microsoft, Oracle, PWC, Salesforce, Walmart and Web3 Labs.
Maker: autonomous decentralized platform responsible for issuing and maintaining the stablecoin DAI; in addition to participating in the voting, holders of the MKR token can take part in auctions for loans that have not been paid in time.
IDEX: decentralized and non-custodial exchange of ERC-20 tokens; Hybrid architecture keeps the keys for transfers in the hands of users, however the platform itself is responsible for sending data to the blockchain, enabling the experience of an order book in real time.
Do you already know the stable coin USD Coin (USDC) , an ERC-20, cryptocurrency paired in dollars, 100% approved and regulated by North American entities? Find out more here and get more out of this cryptocurrency listed on the Bitcoin Market.
Can Ethereum debunk Bitcoin?
It is not possible to make long-term predictions for Ethereum, as the cryptocurrency is entering a long period of transition to the 2.0 network . The changes will be significant, and include migration to the Proof of Participation (PoS) system, fragmented architecture (shard) , in addition to a new virtual machine that can be run in a web browser.
This 2.0 network will be created in three major stages , and gradually smart contracts and decentralized applications will be migrated. Either way, Ethereum will continue to maintain its ecosystem in a complementary way to Bitcoin , without the intention of establishing itself just as a currency. Both cryptocurrencies will continue to develop in parallel, so the growth potential is exponential in both Bitcoin and Ethereum.
