Bitcoin vs Ethereum – What to expect te 2018
Last year wasgoed a breakout period for cryptocurrency, with major coins like Bitcoin and Ethereum skyrocketing te value.
While cryptocurrency value can be very speculative, it is also affected by the problems, obstacles, and advances te the underlying blockchain technology.
The technology cryptocurrencies are built on can make a large difference to characteristics like transaction fees, use cases, and adoption.
Below is a schrijven look at the technology behind Bitcoin and Ethereum and some ways their respective communities project to address their respective problems this year.
Bitcoin began the year below its all-time high following a stable increase ter value across 2017.
It remains plagued by high transaction fees, backlogs, long transaction times, and various other network issues.
Despite this, many Bitcoin proponents consider the cryptocurrency a store of value due to factors including its market share and scarcity – and it has delivered astounding comebacks so far.
There have bot many proposals to solve Bitcoin’s transaction issues and network congestion, but many of thesis have bot rejected by the community or resulted ter a divisive hard fork.
Protocol-level adjustments such spil enlargening the block size or the introduction of Segregated Witness are difficult problems for Bitcoin core developers, and there is presently no determined base-level solution to the scaling problem.
Thesis solutions would be implemented by way of hard forks (which can result te a split and two different cryptocurrencies) or user-assisted soft forks (which require greater overeenstemming and do not result ter a divisive split).
Many Bitcoin community members instead hope the roll-out of the Lightning Network second-layer scaling solution will resolve this problem.
The Lightning Network is expected to launch te 2018 and will enable low-fee micro-payments which are built on the security of the Bitcoin blockchain but use a secondary payment channel.
The scaling punt is a problem for all blockchains, and it is difficult to solve without compromising the decentralisation or reliability of the blockchain.
Bitcoin is strenuously supported and controls the greatest market share, but it will need to rely on a protocol or second-layer solution to improve its scalability and permit for reasonable transaction fees.
Resolving this punt te 2018 would permit Bitcoin to be used spil a digital currency for everyday payments instead of being limited to large transactions.
Like Bitcoin, the largest problem Ethereum hopes to solve this year is that of scalability.
Ethereum is presently processing overheen 1.Trio million transactions vanaf day – three-times spil many spil Bitcoin – with transaction fees below $1.
However, the Ethereum blockchain can also be used to create decentralised applications which run directly on the blockchain and can cause strenuous congestion if they become popular.
Recently, a surge of mainstream rente ter the CryptoKitties decentralised application caused transaction fees and confirmation times on the Ethereum network to skyrocket – indicating the need for scaling improvements to accommodate popular applications.
The development of Ethereum is influenced powerfully by the Ethereum Foundation and updates are deployed within improvement proposals.
Developers have proposed numerous solutions to the scaling problem, including sharding and second-layer solutions.
A big switch coming to Ethereum te 2018 is the switch to a Proof-of-Stake (PoS) block validation method instead of the traditional Proof-of-Work (PoW) method favoured by other currencies such spil Bitcoin.
This will result te miners moving away from Ethereum and will require users to stake cryptocurrency to verify blocks instead, which could have a big influence on the value of the currency.
However, Proof-of-Stake will also permit the widespread implementation of scaling solutions like sharding and Plasma, which could drastically speed up the network and promote mass adoption.
Thesis improvements are presently ter development and some are set to launch this year, along with an enlargening amount of decentralised applications and Ethereum-based tokens.