Bitcoin would have become a quasi-monopoly in the cryptocurrency domain, if not for Ethereum. Ethereum has recently seen a spectacular rise so much that, at one point it stood to rival Bitcoin in popularity. Ethereum was created in 2015 by Vitalik Buterin and uses a similar Proof-of-Work blockchain like Bitcoin. However, Ethereum uses its own Ethash hash algorithm and is scripted using C++ and Go. Ethereum also uses its own currency called Ether.
What makes Ethereum much better than Bitcoin is its implementation of Turing -complete smart contracts. Under Smart Contracts, users are paid only after specific conditions are met. Generally, regular transactions require a third-party overseer to ensure that the terms of a transaction are fulfilled before the transaction is made. This is done to minimize fraud since blockchain transactions are irreversible. However, the use of smart contracts eliminates the need for third-parties, as transactions automatically wait until the conditions are met. Apart from the convenience, it also benefits in terms of speed. Most of the paperwork is not required anymore. In the end, the transactions on Ethereum could be up to 5x faster than those on Bitcoin. Transaction on Ethereum is essentially verified by hundreds of users and stored on digital, public ledgers. This immutable, public record eliminates any chance of manipulation later.
After Bitcoin regained its statues, Ethereum was quickly pushed back. However, it is still the second most popular cryptocurrency in the market and accounts for 7 percent of the market cap. If Bitcoin falters in the future, Ethereum would stand to gain the most. Also, Ethereum has a much higher supply cap than Bitcoin, which gives room for more price fluctuations. Compared to the 18 million bitcoins in circulation, there are 109 million ETH in the market right now.
We have put together the ultimate beginner’s guide for understanding and investing in cryptocurrency!