Bitcoin and Ethereum power what are today two of the top three cryptocurrencies in the market, BTC (bitcoin) and ETH (ether). While Bitcoin is right at the top, Ethereum has also been doing well despite being a newer cryptocurrency, having achieved the second position in the market (in terms of market cap) already before Ripple (XRP) recently displaced it and crashed to third position again. Given Ethereum has managed to capture the market’s interest at a comparatively less amount of time, commentators have even begun to tout the ETH token a better horse to bet on vis-a-vis BTC. However, does that mean that the Ethereum network trumps Bitcoin in every count? Not really. Let’s have a look at the 5 ways in which Ethereum still falls short of matching to to the sophistication of Bitcoin:
1. Consensus Failures : The Ethereum platform has a substantially large surface that becomes open to attacks, and security breaches become particularly likely. With a high number of consensus failures, Ethereum often poses a great deal of risks vis-a-vis Bitcoin.
2. Less potent as currency : When it was designed, bitcoin was specifically meant to serve as a currency, especially in the wake of the 2008 financial crisis all around the world. On the other hand, ether was designed merely as a token that was meant to facilitate the smart contracts built on the ethereum system and also to support the dApps that run on it. Bitcoin serves much better as an appropriate store of value, especially because it was designed as such.
3. Higher supply and lower value : In this area, bitcoin easily trumps ether. This is because of the scarcity feature that is inherent in bitcoin. It has an upper limit of the mythical number 21 million while ether is produced every year with an annual cap of 18 million. Purely from the point of view of demand and supply and considering bitcoins have a theoretically limited supply, its price is expected to go up more rapidly and steeply than ether’s possibly can.
4. Lower mainstream popularity: If one is to ask any layman to choose between Bitcoin and Ethereum, they are more likely to choose Bitcoin because its popularity skyrocketed as it steadily grew from 2008 and climaxed in end-2017. With a much larger number of Twitter mentions to a better adoptability in real life as currency, bitcoin is naturally more popular and acceptable to the mainstream which gives it an edge over its closest competitor.
5. More centralised : A recent study has revealed how the top four mining pools of Bitcoin control 53% of the network’s mining capacity while in Ethereum, about 61% is controlled by the top three. Although both networks are less centralised than blockchain networks should ideally be to meet security and transparency goals, bitcoin continues to operate at a better and higher level of decentralisation than Ethereum.
Therefore, in some areas such as the ones detailed above, Ethereum continues to lose out to Bitcoin’s advantages as the first major cryptocurrency to have created waves in the market. While pros may be many for the network, some cons still make it a distant second to Bitcoin.