Bitcoin

Ethereum Smart Contracts Might Outsmart Bitcoin

It goes without saying that the two most notable cryptocurrency to date are bitcoin and ethereum. Both of these are valued at $8469.81 and $179.59 respectively. Bitcoin was the very first to arrive at scene, designed by Satoshi Nakamoto, the great enigma, whereas ethereum was designed 5 years later by the 23 years old Vitalik Buterin.  Even though both are cryptocurrencies and they follow the same consensus mechanism which is called proof of work, there are a ton of features that make these two very unlike each other and potential rivals.

The most important difference between bitcoin and ethereum is that, fundamentally Bitcoin was just designed to be a financial tool which was supposed to carry out financial transaction of any sort over the network, providing security and transparency to all the nodes on the network. Beyond that bitcoin has no other functionality. It is meant to fulfill one role only; that of a ledger to carry out financial transactions.

Ethereum on the other hand has emerged to be a very flexible instrument upon which many other platforms can be built. These are called dapps, short for Decentralized applications. These applications are designed using a language supported by ethereum. The most important feature of ethereum is smart contracts. A Smart Contract is merely a piece of code that collects some real time data, based upon that data it reaches on a decision and then it makes a transaction. This transaction could also be a function that needs to be performed, given a defined condition in the contract becomes true.

With the inclusion of smart contracts, ethereum has produced myriads of use cases. Smart contracts can be used in a variety of fields ranging from healthcare, gaming, supply chain management and numerous others. Its utility spans over quite a few fields and makes it highly adaptable. There now exist over a thousand applications that are hosted over the ethereum network.

The one detrimental feature that is common between Bitcoin and Ethereum is that both of them for now follow the same consensus algorithm. Proof of work may be a very secure mechanism but in the case that there is a lot of incoming traffic, congestion would be created. This compromises the entire speed of the network as less and less transactions are approved at a time. Such an instance occurred in 2017, when the entire network of cryptokitties (an online game) jammed as the number of transactions increased. Eventually the matter was taken care of. Owing to unfavorable effects of the limited size block, ethereum announced that they were going to migrate from Proof of Work to Proof of Stake. This migration would consist of two phases.

See More : PoS will Bring More Security to Ethereum than PoW – Vitalik Buterin

If Ethereum does incorporate the changes mentioned above, it would automatically give it yet another advantage over bitcoin. In addition to having a myriad of use cases that are increasing with each passing day it would have the much more processing power than bitcoin as well.

See More : Royal Rumble: Bitcoin VS. Ethereum

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Ahsan Khalid

Blockchain Developer. An Electrical Engineer with majors in software development. I present forward my insight regarding the latest happenings of the blockchain world. All views on my articles are my own. Email: ahsan@blockpublisher.com or editor.news@blockpublisher.com

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