The price of ether, the world’s second most valuable cryptocurrency, has been hitting new highs ahead of a big upgrade to its underlying platform, Ethereum. Ether is currently valued at slightly around US$500 billion (£363 billion) in total. That’s still less than half of the value of the most popular cryptocurrency, bitcoin.
But, could this improvement, which is a critical step toward a much greener and quicker version of the present system, propel Ethereum to the top of the internet’s platform rankings?
To begin, it’s critical to comprehend the differences between bitcoin and Ethereum. Bitcoin is a digital currency that allows users to transmit money to one another without the use of banks. It is based on blockchain technology, which is an online ledger in which transactions are verified and recorded by a decentralized network of computers called as validators.
Validators are compensated for their efforts by obtaining freshly created bitcoins, a process known as “mine.” To add to the appeal, bitcoin is quite rare: there are only about 18 million coins in circulation, and the protocol states that there can never be more than 21 million.
Bitcoin vs. Ether in terms of overall value (market cap)
Ether is comparable to bitcoin in that it functions in a similar fashion, but it is not the same. It’s an open-source software platform that developers are using to create thousands of blockchain-based apps all around the world to buy bitcoin in Dubai
This implies that these applications can all run independently of a company’s control. Cryptocurrency exchanges, insurance systems, and new types of games are just a few examples. Ether is comparable to bitcoin in that it functions in a similar fashion, but it is not the same. It’s an open-source software platform that developers are using to create thousands of blockchain-based apps all around the world.
Smart contracts, which are automated agreements that ensure that money and assets change hands when specific criteria are met, are at the heart of the platform. Ether is used in all transactions on the network, and the site’s success is why ether has been the second-largest cryptocurrency behind bitcoin for the past several years. The fact that ether powers the platform – it’s even called “gas costs” – gives it and usefulness and inherent worth that bitcoin lacks.
Validators give the greatest priority to those who are ready to pay the most for their transactions. For example, the typical transaction on crypto exchange Uniswap costs roughly US$44 in gas fees at the time of writing.
Bitcoin has similar congestion difficulties, which its developers are attempting to address by adding apps like Lightning to the mix, which offer speedier transaction speeds.
Bitcoin presently consumes as much energy as the Philippines, while proponents maintain that most of this energy would otherwise be squandered — for example, oil rigs burning natural gas since selling it is unprofitable. Proponents also point out that the network is gradually transitioning to use a lot more renewable energy.
Ethereum 2.0 and Possibility of it Taking down Bitcoin
In any case, creating an ethereum 2.0 will overcome these issues by switching the platform’s validation method from “proof of work” to “proof of stake.” Without going into too much detail, proof of work is a protocol in which all validators attempt to solve difficult equations in order to establish the validity of each proposed transaction. Because the system picks one validator at random to confirm each transaction, there’s no need for all validators to conduct this power-hungry task with proof of stake.
It should also address the issue of gas prices by increasing the platform’s processing capacity from 30 to possibly 100,000 transactions per second, as well as allowing for more sophisticated smart contracts than previously to sell bitcoin in Dubai.
It will be fascinating to observe how all of this impacts the price of ether in respect to the so-called “eth killers” in the run-up to the unification of Ethereum’s two blockchains.
But, at the end of the day, the question is what this means for bitcoin. Bit coiners would claim that their protocol is more decentralized than proof of stake, and that they have the benefit of being the crypto brand with which investors are most comfortable risking their money.
The issue is whether these benefits are balanced by the fact that Ethereum 2.0 has better environmental credentials and can process more transactions. Bitcoin is presently valued around twice as much as ether, although there has been discussion of a “flipping” in which ether overtakes bitcoin. Is it possible that it will happen in 2022? It will be intriguing to see what happens now that bitcoin’s hegemony is on the line.