What is Ethereum?

Ethereum is a technology for building apps and organizations, holding assets, transacting and communicating without being controlled by a central authority. There is no need to hand over all your personal details to use Ethereum - you keep control of your own data and what is being shared. Ethereum has its own cryptocurrency, Ether, which is used to pay for certain activities on the Ethereum network[2].

Ethereum is a decentralized blockchain platform that establishes a peer-to-peer network that securely executes and verifies application code, called smart contracts. Smart contracts allow participants to transact with each other without a trusted central authority.

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What Is Bitcoin?

Bitcoin (BTC) is a cryptocurrency, a virtual currency designed to act as money and a form of payment outside the control of any one person, group, or entity, thus removing the need for third-party involvement in financial transactions. It is rewarded to blockchain miners for the work done to verify transactions and can be purchased on several exchanges.

Bitcoin was introduced to the public in 2009 by an anonymous developer or group of developers using the name Satoshi Nakamoto.

It has since become the most well-known cryptocurrency in the world. Its popularity has inspired the development of many other cryptocurrencies. These competitors either attempt to replace it as a payment system or are used as utility or security tokens in other blockchains and emerging financial technologies[1].

What is the difference between Ethereum and Bitcoin?

Launched in 2015, Ethereum builds on Bitcoin's innovation, with some big differences.

Both let you use digital money without payment providers or banks. But Ethereum is programmable, so you can also build and deploy decentralized applications on its network.

Ethereum being programmable means that you can build apps that use the blockchain to store data or control what your app can do. This results in a general purpose blockchain that can be programmed to do anything. As there is no limit to what Ethereum can do, it allows for great innovation to happen on the Ethereum network.

While Bitcoin is only a payment network, Ethereum is more like a marketplace of financial services, games, social networks and other apps that respect your privacy and cannot censor you[2].

At the following we are going to compare most important metrics between Ethereum and bitcoin.

Sectoin1 : marketcap , price and …

In this section we are going to compare bitcoin and Ethereum in point of view of marketcap metrics. Market capitalization refers to the total dollar market value of a blockchain's outstanding shares of stock[5].

What is circulating and max supply?

*The crypto token supply establishes how many cryptocurrency coins will exist at any particular time and could be the circulating, maximum or total supply.*The total supply of a cryptocurrency refers to the sum of the circulating supply and the coins that are locked up in escrow, a smart contract where a third party temporarily keeps an asset until a particular and agreed condition is met. The maximum supply is the upper limit on the number of tokens that can be created, while the circulating supply is the number of tokens that exist and are available for trade in the market.A cryptocurrency circulating supply refers to the number of tokens in circulation in the market at any given time that are available for trade.

The circulation supply metric is used to define the market capitalization of a given cryptocurrency and accounts for the size of its economy. A cryptocurrency’s market cap is obtained by multiplying the price per unit by the number of all the existing coins in a blockchain, even the ones that have been lost or confiscated[7].

so if we are going to find out how a blockchain is valuable we would refer to marketcap. The ranking of crypto is based on marketcap.  A cryptocurrency’s circulating market cap is calculated using the following formula:

Circulating market cap = current price x circulating supply [6]

so with rising in price marketcap will rising.

In following charts we have bought price, marketcap. Ethereum price in bitcoin chart shows one Ethereum token is how much bitcoin. Ethereum price (Y) based on bitcoin price (X) shows with price change of bitcoin how much Ethereum price will change.

Additional informations

Total supply of bitcoin is 21M and its circulating supply is 19.243 M[3]

There is no limitation for max supply of Ethereum[4] but its circulating supply is 122.373 M [3]

References

2. https://www.ethereum.org
3. coinmarketcap.com

thanks to @flipsidecrypto 

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Results

• There is no clear maximum or total supply of Ethereum it may be a weakness for Ethereum blockchain but total supply of bitcoin is 21M and 19.243 M of these bitcoins tokens already are in ecosystem.

• There is no clear maximum or total supply of Ethereum it may be a weakness for Ethereum blockchain.

• 91% of all Bitcoins already are in their ecosystem it can be a good news for Bitcoin’s users. but it can be also a bad news for miners because in time miner’s tip will grow small.

• At the price spike of all cryptocurrency means November 2021 Ethereum’s market cap was 546B and bitcoin marketcap was 1.15T. after the dropping already Ethereum’s market cap is 148B and bitcoin marketcap is 343B. so the ratio of Ethereum marketcap to bitcoin at spike was 47% and today is 43% means after that Ethereum could get closer to bitcoin marketcap in the big spike on dropping it’s marketcap got away from bitcoin marketcap.

• Before April 2021 each Ethereum token worth 0.03 bitcoin but after April it worth almost 0.07 bitcoin. means April 2021 was a golden month for Ethereum and it can get closer to bitcoin on first place of cryptocurrency.

• April 2021 was a golden month for Ethereum and it can get closer to bitcoin on first place of cryptocurrency

• With exploring of slope of chart “Ethereum price (Y) based on bitcoin price (X)” we can find out Ethereum price how change with bitcoin price. when Ethereum price was 1300$ bitcoin price was 17600$ dollars means the slope is 0.073. when Ethereum price was 2872$ bitcoin price was 40000$ dollars means the slope is 0.0718. when Ethereum price was 3813$ bitcoin price was 57000$ dollars means the slope is 0.066. the higher slope amount shows more increasing on Ethereum price rather bitcoin and reverse. so we can conclude on lower prices Ethereum price could rise more and in higher prices bitcoin could.

Section 2: Transaction fee , base fee , gas fee

On previous section we mention that Ethereum has no clear maximum supply in this section we will figure out how Ethereum can keep the number of tokens balance. also we will explore the gas fees. but before it we should review a couple of concepts.

What is gas fee and base fee for Ethereum?

A gas fee is a blockchain transaction fee, paid to network validators for their services to the blockchain. Without the fees, there would be no incentive for anyone to stake their ETH and help secure the network.

Every block has a base fee which acts as a reserve price. To be eligible for inclusion in a block the offered price per gas must at least equal the base fee. The base fee is calculated independently of the current block and is instead determined by the blocks before it - making transaction fees more predictable for users. When the block is mined this base fee is "burned", removing it from circulation[8].

What Are Bitcoin Transaction Fees?

Mathematically, transaction fees are the difference between the amount of bitcoin sent and the amount received. Conceptually, transaction fees are a reflection of the speed with which a user wants their transaction validated on the blockchain. When a miner validates a new block in the blockchain, they also validate all of the transactions within the block.

Once a miner has validated a new block, they receive the transaction fees and block subsidy associated with that block. The sum of the transaction fees and block subsidy is the block reward.

Results

• After London upgrade a part of Ethereum transaction fee burn as base fee. the charts conformed almost 85% of Ethereum transaction fee is base fee.

• Transaction fee for bitcoin are giving to miners but for Ethereum after London upgrade 80% of transaction fee will burn as base fee. means more transaction in Ethereum blockchain cause fewer Ethereum token and for bitcoin more transaction number cause more bitcoin token.

• more transaction in Ethereum blockchain cause fewer Ethereum token and for bitcoin more transaction number cause more bitcoin token

• The average transaction fee for Ethereum is more than 2$ but for bitcoin this amount is about 1.4$. Ethereum high gas fee is not just weakness but with burning tokens it keep token number balance.

  • Ethereum high gas fee is not just weakness but with burning tokens it keep token number balance. The high gas fee makes Ethereum an anti-inflationary asset

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Section 3: Apps, users and transactions number

On section 3 we mentioned more transaction number cause Ethereum tokens burn and bitcoin token mints. Other metrics we can compare two blockchains is being programmable. means apps like Defi and others can be lunch on blockchain or not? also we can compare how many active users there are.

Result

• The references of charts used in this section are [9],[10],[11].

• As mentioned on previous section no total supply defined for Ethereum but there is a mechanism keep Ethereum tokens balance and on some cases made Ethereum an anti-inflammatory asset. this mechanism named base fee. also we mentioned, around 80% of transaction fee of Ethereum burns as base fee. so the more transaction, the more base fee. contrary to Ethereum for bitcoin the more transaction, the more bitcoin mined. it is clear the monthly Ethereum’s transactions are almost 30M and bitcoin are 250K. we can conclude 30M2$=60M$ are burning monthly and 250K*1.4=340K$ bitcoin generate monthly. it means bitcoin could never be an anti-inflammatory asset.

• bitcoin could never be an anti-inflammatory asset.

• After London upgrade only 20% of transaction fee of Ethereum are given to miners. also base on Ethereum merge only who that Ethereum staked could mine Ethereum. means in addiction to the base fee more Ethereum will locked to staking pools.

• It can be said that the best advantage of Ethereum over Bitcoin is its programmability. means Ethereum is not just a digital asset but many program like markets, NFTs and .. could be lunched on Ethereum network. also the more program lunch, the more transaction and more transaction cause more base fee. There are 14.5M program lunched on Ethereum. it’s amazing!!!

It can be said that the best advantage of Ethereum over Bitcoin is its programmability

• Number of active user of Ethereum is twice of bitcoin.

• After London upgrade and merge Ethereum’s, miner tip significantly reduced. in addiction the only who has staked Ethereum can mine. For bitcoin in time mine difficulty have been growing. means one day will come that Bitcoin mining is not economical anymore.

• One day will come that Bitcoin mining is not economical anymore. on that day bitcoin has to That day Bitcoin will have to change its protocols.

At last we can conclude there are two big advantage for Ethereum blockchain.

first: It’s high transaction fee. Ethereum transaction fee are high (more that 2$ for each transaction). this keep Ethereum alive with keeping Ethereum token number balance and keeping miner’s tip constant.

second: Ethereum is programmable and there are 14.3M program lunched on Ethereum.

for bitcoin:

first: it has biggest marketcap.

second: the total supply of bitcoin is limited.

Bitcoin is not programmable

The main difference between Ethereum and Bitcoin is the fact that Ethereum is programmable. That feature broadens the scope of Ethereum, making it more than just a digital currency. It makes Ethereum a marketplace for financial services, games and apps[12].

Methodology

• There is not sufficient platform for extracting bitcoin’s information. so we have used the exist analysis of bitcoin like blockchain.com. so we have many references and this analysis is more descriptive.

• For Ethereum the flipside platform have been used.

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The users of bitcoin network

Bitcoin miners tip

Average bitcoin per transaction $