At the beginning of its appearance, Ethereum was believed to be Bitcoin 2.0. However, when compared to Bitcoin, Ethereum still has its weaknesses. The supply or supply that Ethereum has is unlimited, while Bitcoin has a supply of at least 21 million.
However, either Ethereum or Bitcoin, their value is not influenced by a central authority. Both are crypto assets that are built on blockchain and are decentralized.
What is Ethereum? What are The Differences with Bitcoin?
Ethereum is an open-source, blockchain-based, and decentralized software platform used for its own cryptocurrency. Ethereum is also a technology that functions as digital money, global payments, and applications.
However, Ethereum is not only a platform, but also a program that runs on the blockchain. In other words, Ethereum is here to present the ERC20 network as a place for the birth of new cryptos.
Ethereum was first launched in 2013 in a whitepaper by Vitalik Buterin, a developer currently researching Bitcoin. At that time, Buterin believed that Bitcoin could be made more than just an asset to store wealth.
With the smart contract feature, it can be used as an automatic reminder when payments must be made. So in 2014, this project was carried out by Buterin not for Bitcoin but to create Ethereum.
Around 60 million Ether tokens were sold to early investors while the project was still under development. This is a big achievement so that Ethereum can continue to be developed.
Then since then, Ethereum has shown its development. To date, several projects have been launched with varying degrees of success.
Ethereum’s Weakness from Bitcoin
There are several weaknesses that Ethereum has. The first is in terms of speed of access. Ethereum is not completely reliable because it still relies on distributed servers.
As an analogy, if the website server service is down, the system that joins it will also not function. Even worse, the developers cannot cope with the Blockchain function independently. Because all the systems contribute to the whole.
When Ethereum is experiencing a hard-fork it will immediately affect the application being developed. In addition, the transaction fee (gas fee) for transferring crypto assets on the ERC20 network is still quite expensive.
Ethereum Is Different From Bitcoin
If seen from the previous explanation, Ethereum is a derivative or fork of Bitcoin in the mining zone. This clearly proves that Ethereum is not the same as Bitcoin.
Simply put, when you hear Bitcoin the thing to think about is digital money. whereas when you hear Ethereum is a smart contract. Here’s a simple way to understand the difference between the two.
In terms of supply or supply, these two crypto assets are different. ETHis unlimited, while Bitcoin has a limited supply of only 21 million.
Ethereum is reforming to become Ethereum 2.0
ETH is on the way to Ethereum 2.0. This evolution by utilizing DeFi technology or decentralized finance has entered its first phase. One of the goals of evolution to Ethereum 2.0 is to limit the amount of Ethereum circulating supply with a staking scheme.
The staking scheme allows Ethereum owners to lock a minimum of 32 ethereum and its multiples. In addition, it is also intended that Ethereum is locked or reduced so that supply decreases.
If the supply decreases, the ETH price will be more expensive. Because one of the determinants of price is supply and demand
More importantly, the evolution of Ethereum 2.0 will make transaction fees (gas fees) much cheaper as well as faster.
Ethereum developers believe that Ethereum will increase even though the price is already high.
Ethereum is believed to be increasing, even though the price is already high. It is possible that later the demand for Ethereum will increase so that the price can increase dramatically. So that it can affect other crypto assets because people are starting to understand about other crypto assets.