The past week has not been a kind one to the crypto markets, with concerns over regulation and other legal issues causing the prices of many well-known tokens to rapidly fall in value.
One such victim of the downturn was Ether, the crypto token that powers the Ethereum network, which at the time of writing has fallen 10.1% over the last 24 hours to around US$2,299.
However, while the price of Ether has been weakened in recent days, the technology behind the token has helped to make it the second most valuable cryptocurrency on the market with a value of around US$266bn, second only to Bitcoin’s market cap of US$938bn.
What is Ethereum?
The Ethereum network was launched in 2015 and is similar to Bitcoin in multiple ways.
Both operate on a decentralised blockchain network, meaning both cryptos are not issued by a central authority like physical cash, and both of its tokens can be traded on the public markets.
However, the key difference between Ethereum and Bitcoin is how their underlying blockchain technology is utilised.
The Bitcoin network was created as an alternative to real-world currencies issued by countries and central banks, while Ethereum is designed to increase accessibility to blockchain technology as a foundation for apps and other purposes.
The potential uses of Ethereum in this manner make it much more versatile than the Bitcoin network, allowing a plethora of different decentralised apps (dapps) to exist on the platform while still maintaining the key aspects of blockchain technology.
Dapps built upon the Ethereum network include Brave, a web and mobile browser, non-fungible token (NFT) marketplace Rarible and music streaming platform Audius among hundreds of others.
Is it better than Bitcoin?
Technically, Ethereum and Bitcoin should not compete with each other due to their different objectives for blockchain technology, however, the status of both as tradable investments on the crypto market has brought the proponents of both into conflict as debate rages among traders over which is more valuable.
There is an argument that while Ethereum’s market value is still a fraction of Bitcoin, the versatility of its technology may allow it to become more valuable in the future as more and more applications use its technology as a foundation.
Others have argued that in combination with its versatility, Ethereum is also more advanced than Bitcoin, particularly with its use of smart contracts, self-executing agreements written into computer code that are irreversible and trackable, as well as being faster and having cheaper transaction fees than its older and more expensive sibling.
With this in mind, plus the fact that mining Ether is quickly becoming more and more valuable, Bitcoin and Ethereum may find themselves locked in an ongoing battle neither intended to participate in. However, Ethereum may find its versatility gives it the ultimate edge in the battle of the blockchains.