I’m not surprised that investors are interested in cryptocurrencies like Ethereum (CCC:ETH-USD). After all, this has been a period of accelerated innovation for financial technologies. And the crypto space is one area where we’ve seen extreme progress over just a few years. Cryptocurrencies have been tearing in recent years, with Bitcoin (CCC:BTC-USD) leading the charge.
Bitcoin was invented in 2009 by an unknown person or group of people going by Satoshi Nakamoto. When it was first introduced in 2009, you could purchase one Bitcoin for essentially nothing — but by November 2021, they were going for nearly $69,000.
While many people are familiar with Bitcoin’s meteoric rise, Ethereum has also experienced an epic bull run during this time frame. Ether’s success is nothing short of astonishing. The cryptocurrency launched in 2015, and by November 2021, it had hit a record high value of $4,891.
While both Bitcoin and Ethereum were created with the intention of being king of cryptocurrencies, they differ in many ways. They’ve been developed for very different purposes with internal dynamics that reflect this difference in meaning — Ethereum being significantly more decentralized than its counterparts while still maintaining some level of interference from designers who want to see it grow into a functioning economy. Meanwhile, Bitcoin is principally a store of value. It is the forerunner of all other cryptos. Therefore, you cannot ignore its movements.
But Ethereum is cause for more excitement. With the help of smart contracts, Ethereum has proved to be more than just a store of value. These self-executing agreements allow for transactions with absolutely no downtime or fraud risk, making it an attractive alternative in today’s world, where almost everything comes at a cost.
There are also significant near-term catalysts for Ethereum that make it an excellent buy this year. Environmental Impact of Cryptocurrency
The international community has been cautious of Bitcoin due to its potential impact on national currencies and taxation systems. El Salvador was one nation that took a different approach , officially recognizing it as legal tender last year. In 2021, China banned cryptocurrency mining and all forms of crypto to move towards a digital version of their currency.
The electricity used to mine Bitcoin is incredibly wasteful. It takes up an incredible amount of energy. The process only worsens with time as more people continue using it, which could cause problems for our environment decades ahead if nothing changes soon enough. Bitcoin currently consumes about 0.5% of all electricity consumed globally — more than several countries.
Bitcoin uses a consensus protocol called proof of work (PoW). This system requires participants to solve complicated mathematical equations. Solving these problems proves that one has invested enough computing power.
The move to a new consensus mechanism, called proof of stake (PoS), has been long-awaited by many in the Ethereum community. The development team originally planned this transition as an important part of scaling up this blockchain with its upcoming Eth2 upgrades. And now we’re finally seeing some progress. With the switch over from PoW to PoS, we can finally expect faster speeds and cheaper transactions.
Ethereum will become cleaner and better for our planet as it transitions over from one version of the protocol into another. Consequently, adoption rates will improve for Ethereum versus Bitcoin. Ethereum: Its Potential and Applications Could Be Limitless
Unlike Bitcoin, which is valuable only for storing wealth and as an investment vehicle, Ethereum offers endless possibilities. Ethereum is the go-to platform for nonfungible tokens (NFTs) . It also introduced decentralized finance with versatile smart contract capabilities that make it possible to create contracts between parties without any third-party involvement.
The future of decentralized autonomous organizations (DAOs) might be in smart contracts. These virtual organizations could replace traditional corporations and function without any human or institutional intervention, engaging with economic transactions such as buying and selling goods, which will lead them towards becoming more profitable than before. The idea of a DAO is still in its infancy. But decentralized applications (Dapps) are currently being developed for Ethereum today.
These standalone apps utilize smart contracts and run on the Ethereum Virtual Machine (EVM). The potential for decentralized applications is huge. Gaming, shopping and banking could become trillion-dollar industries without relying on a central server to facilitate transactions between players or customers. That will continue to drive Ethereum’s value higher, moving forward. The Shift to Ethereum 2.0
Ethereum plans to shift away from mining with a new proof-of-stake model in 2022. With this change, users will only be able validation transactions according to their coin holdings rather than […]
source If You Buy One Top Crypto in 2022, It Should Be Ethereum, Not Bitcoin
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