What are the advantages of Ethereum compared to Bitcoin?

When Bitcoin appeared on the scene in 2009 it changed the way the world viewed currency and value. It also paved the way for a host of blockchain based projects and currencies. The best of these is currently the Ethereum platform. Ethereum is a comprehensive network that enjoys the following advantages over Bitcoin.

Application Platform

While Bitcoin works well as a store of value and not so well as a medium of exchange, Ethereum has the major advantage of being a technology that allows for computer applications to run on the network. The Ethereum network allows for smart contracts, apps, and contains the internal currency ether. This has led to the rapid growth of the platform with a number of apps being built on Ethereum; the network is also used by start-ups to raise money via initial coin offerings which further increases the network’s importance.Currently a large variety of projects are basing themselves on the Ethereum network with industries such as Asset issuance, crowdfunding, domain registration, intellectual property, title registration, and gambling all using the network. Ethereum lets developers build applications without needing to build their own blockchain, these applications can interact with each other on the blockchain and an entire network of interconnected applications is able to develop from this.

Block Times

Ethereum has shorter block times, which makes the platform more efficient. Ethereum allows for blocks, or the records of cryptocurrency transactions, to be created more quickly than Bitcoin. This efficiency leads to quicker transactions, and allows Ethereum to process the large number of transactions that take place across its network. In Ethereum the block time is set around 15 seconds and the network betters Bitcoin’s 10-minute transaction speed through the smart handling of stale blocks by using the Ghost protocol.

Consensus Mechanism

Ethereum currently utilizes the Proof of Work (POW) mechanism in the same way as Bitcoin. Here miners conduct transactions and prove their work by accomplishing complex computational tasks, and then include the block in the chain. Within this system the first miner takes block reward. The Ethereum network is moving over to the Proof of Stake (POS) mechanism. Here users in possession of the highest account balances, coin age, or any other characteristic chosen as a guarantee criterion are able to create blocks in the chain. Within this system miners take transaction fees as there is no block reward. The POS system is regarded as being cheaper, more reasonable, and less resource intensive.With the POS consensus, miners utilize large quantities of energy and these energy costs are paid with fiat currencies, this leads to a constant downward pressure on the digital currency’s value. Rewards for the creation of new blocks are also different. With POS, a miner may possibly own none of the digital currency they are mining. While in POS, forgers are always those who own the coins minted.

Economics

Ethereum runs off a slightly different economic model compared to Bitcoin. For example, Bitcoin block rewards halve every 4 years while Ethereum releases the same amount of Ether each year continuously. This allows for continued progression on the Ethereum network compared to Bitcoin. Also, Bitcoin was mass released with early miners owning the majority of the coins that will be mined. Ethereum was crowd funded and as a result, 50% of the Ethereum coins will be owned by miners in year five.

Clear Vision

Bitcoin was created by the mysterious Satoshi Nakamoto, who has kept his identity a secret. This has led to a number of issues with regards to overall policy and consensus with regards to the direction Bitcoin should take. The forking of the currency has been a result of this lack of cohesion. In contrast, Ethereum's creator, Vitalik Buterin has always been in the open.A Canadian citizen born in Russia, Buterin published his idea for the digital currency in 2013, aged 19, and set up the platform over the next two years. The presence of a visual head helps Ethereum deal with conflicts and issues of governance more efficiently than Bitcoin.