We have Bitcoin maxi’s and Ethereum maxi’s, both think that their blockchain and crypto is the best alive. But which one, or is any actually superior? In this article we will be discussing some facts about both and we will weigh out which one is actually better.
Summary of both chains
For starters, Bitcoin. Satoshi Nakamoto created a sound money, fully decentralized, peer-to-peer, digital cash system. He removed the trust, that is usually required when making a transaction, by making Bitcoin on the building blocks of immutable proof and verification. Every transaction has to be accepted by every member in the network so that everyone shares the same ledger. The transaction are inside of blocks, miners solve difficult mathematical problems to verify these blocks. This is the Proof-of-Work system. As time goes by the difficulty increases and requires more computing power. Over time this will always keep the network secure. Satoshi Nakamoto created something that makes BTC very valuable(excluding all the other amazing technology behind it) digital scarcity. Next to being digitally scarce BTC is also absolutely scarce, this is the first liquid commodity EVER that has absolute scarcity. Gold is scarce, but when the gold price rises it incentivizes people to mine with more power and more equipment to get more gold. The supply of Bitcoin is fixed, there will never be more than 21 million Bitcoins. This can be a curse and a blessing, depending of your point of view. From the eyes of miners this is not good because their rewards go down over time and the difficulty is constantly increasing. But, for buyers and holders this is amazing, the fixed supply will never inflate it and when most Bitcoins are mined and held it will basically only go up over time. Keeping the Bitcoin network secure and verifiable is accessible for everyone. Bitcoin is completely open and transparent. Everyone is able to run a full node on any computer and verify the supply and the validity of each coin. The group of developers that write new upgrades or changes do not approve their own ideas. The nodes decide together whether or not they are running the new updates. This sets Bitcoin apart from many other chains. Over it’s run Bitcoin has increased roughly 400,000,000% depending on what price data you are measuring, making Bitcoin the most increasing asset to ever exist. Now lets talk about ETH…
Ethereum got created as an alternative to Bitcoin with totally different ideas and futures than Bitcoin. Where Bitcoin is a currency and store of value Ethereum can be better viewed as a blockchain that allows people to executed financial smart contracts. Ethereum is the home of many projects that use the native currency Ether to pay for transaction fees. The Ethereum blockchain has complex and a lot of smart contracts running on their chain. All the decisions that the developers of ETH made come at a cost of increase in complexity and a loss of true decentralization. The loss of true decentralization comes with a clear upside, flexibility. The flexibility of Ethereum is amazing, there can be so many different types of projects build on top of the chain. Everyone can make a DeFi project with their ideas and create amazing value for the Ethereum ecosystem. Everyday I see amazing new projects being created, some of which will probably still be around in the future because they solve actual problems. Sadly, because of the different ideology, the monetary supply of Ethereum has been changed over it’s lifetime. This doesn’t make it sound money, that’s why I believe it shouldn’t be used as a store of value. It should rather be used as the platform it was intended to be. The total supply of Ethereum can’t be verified easily, because it is calculated differently by some members of the network. On top of this it is expensive to run a node so, you will have to rely on others to verify the coins and supply. The upgrade process and implementation of new ideas is mainly in the hands of a small group of developers. Right now ETH is still Proof-of-Work, but since a few years they are planning on moving to Proof-of-Stake. This will make it even more decentralized and less secure. They also have stablecoins running on top of their blockchain which also increases the centralization of the chain once it goes PoS, but I will talk more about this in a different article. Right now Ethereum is, in my eyes, the best platform for DeFi. It has a lot of uptime compared to other chains that offer the “same” product and the most developers working on projects. If you are looking for good DeFi you wouldn’t have to look over to other chains because Ethereum is the place to be for this.
Comparing the two
Bitcoin is decentralized and sound money. Ethereum is a platform with many financial applications. You can clearly see that the networks are incomparable because they have different ideologies and technologies behind them. Ethereum and the project hosted on it are great investments for the future, just like Bitcoin. Ethereum is way more flexible than Bitcoin and changes faster. Bitcoin has true decentralization, is untimely secure and has a fixed monetary policy. I don’t think people should discard one or the other. Ethereum is there to complement Bitcoin rather than to compete with it. And Bitcoin is there to complement Ethereum. If you want to chose between one or the other you need to look at the ideologies behind the chains and what you are interested in.