potential of Ethereum: Comparison with Bitcoin Bitcoin Width capabilities
Since the world continues to receive digital names, the question of everyone is: What if bitcoin has been able to expand its transaction capabilities using another scalability layer? In this article, we immerse ourselves into the potential width of the Ethereum band and examine how it could be compared to bitcoins in terms of handling of high volumes of transaction.
What does this mean for bitcoin?
When Visa, one of the largest payment processors worldwide, began to explore digital currencies such as bitcoin, faced a critical question: can bitcoin scalp their transaction capabilities with sufficient bandwidth? The answer lies in the current limitations of the Bitcoin Protocol.
Currently, the Bitcoin block size limit is approximately 1 million transactions per day. Although this may seem insurmountable for smaller transactions, it is still in the power of bitcoins. However, with the growth of the number of transactions, especially on platforms such as VISA, which process billions of dollars in daily transactions, the problem becomes more urgent.
ETHEREUM: SOCIABILITY Solution
Enter Ethereum, a blockchain platform that offers significantly different access to scaling. Native Ethereum token, ether (ETH), is not only used for transactions; It is also a programmable blockchain that allows developers to create decentralized applications (DAPPS).
Ethereum’s architecture is designed for scalability. It uses a consensual algorithm called Evidence of Work (Pow), but has made significant improvements over time. The most important update was the transition from Pow to Ethereum 2.0, also known as Serenity.
Comparison Time: Band Width capabilities
If you want to put in the perspective of Bitcoin’s bandwidth, let’s look at some estimates:
- VISA processed approximately $ 6.5 trillion in 2020.
- Bitcoin block size limit is around 1 million transactions per day.
- The estimated number of daily Ethereum blocks would be more than 50 billion.
On the other hand, Ethereum claims to process up to 15,000 transactions per second (TPS). This means that Ethereum has a much higher transaction processing capacity than both bitcoins and visas.
Scalability benefits
The benefits of Ethereum scalability are obvious from its ability:
- Handle thousands of transactions per second
- Support complex DAPP with high -performance requirements
- Enable decentralized financing applications (DEFI) that require massive storage and calculation of data
Calls forward
While Ethereum has made significant progress in scaling, there are still challenges to overcome. One of the main obstacles is the transition to a consensual algorithm of evidence of the (POS) for Ethereum 2.0. POS is more energy efficient than Pow, but requires significant changes in Ethereum basic architecture.
Conclusion
The potential width of the Bitcoin and Ethereum band is extensive, with Ethereum offering a much higher transaction processing capacity. As the world continues to receive digital currencies, it is necessary to consider the consequences of scalability for each platform. While Bitcoin remains a promising candidate, its current limitations are becoming burdensome.
As we move forward, it is clear that both bitcoins and ethereum will continue to develop, with each platform being pushing the scalability boundaries. By understanding these abilities, developers, businesses and consumers can better orientate in the future of digital names.
Sources:
- “Ethereum 2.0: scalable and safe solution of Defi” by Ethereum
- “Digital Payments Strategy Visa” from Visa
- “Plain Ethereum 2.0” by Ethereum