As the cryptocurrency industry continues to grow, it’s important to note the differences between the most popular digital currencies, such as Bitcoin and Ethereum.

Bitcoin has been around since 2009 and has over 13 million users all over the world, but it’s starting to show its age.

There are many who feel that Ethereum is simply more advanced than Bitcoin in terms of security, flexibility and usability.

In this article, we are going to take a look at the top Seven reasons why Ethereum is more advanced than Bitcoin and why it’s likely to continue growing in popularity among cryptocurrency enthusiasts.

While each of the following five factors on their own would make Ethereum an amazing digital currency, together they provide an argument as to why it could overtake Bitcoin as the go-to cryptocurrency over the coming years.

What makes Ethereum More Advanced than Bitcoin?

1. Smart contracts:

Smart contracts are computer protocols that facilitate, verify, or enforce the negotiation or performance of a contract.

They run exactly as programmed without any possibility of downtime, censorship, fraud, or third-party interference.

Ethereum smart contracts allow you to do things like create self-executing wills, bet on sports outcomes and even issue company stock.

Since smart contracts are written using code that is stored on a blockchain, anyone who uses Ethereum must abide by them.

As such, they ensure fairness and transparency while removing middlemen from business processes. If someone wants to change a smart contract, they will need approval from all parties involved.

And because data is replicated across multiple computers in different locations, hacking one central server won’t compromise all data on a blockchain. Thus far, there have not been any major security breaches involving smart contracts running on Ethereum networks.

2. Much faster and greater Security:

In terms of security, bitcoin uses Proof-of-work (PoW), but its current mining method has a limit of 7 transactions per second.

In comparison, Ethereum has much faster speed and greater security than bitcoin through using PoS and PoA technologies.

Proof-of-authority (PoA) allows more transactions to be processed at once while consuming less power than bitcoin’s methods.

Meanwhile, Proof-of-stake (PoS) reduces malicious attacks on blockchain networks.

3. Scalability:

Ethereum has great scalability. The number of people joining Ethereum’s network will increase as time goes by.

Therefore, it is necessary for a cryptocurrency to have great scalability so that it can process all these transactions in time without slowing down or being compromised by hackers.

Scalability is one of Ethereum’s most important features since it can process more transactions at one time compared to bitcoin which can only handle up to 7 transactions per second.

4. Backed up by major institutions:

Major institutions like JPMorgan Chase, Microsoft and Intel are all supporters of Ethereum. Their contribution to its core development is largely responsible for its rise in popularity as a cryptocurrency. But more importantly, it helps give it validity and security as a means of transacting money.

In contrast, Bitcoin has very few high-level corporate backers. This factor is one of many that contributed to Dash’s recent surge in price: Businesses want solutions they can trust. Not just ones they can control on their own terms.

5. Ethereum has better liquidity:

The liquidity of a market refers to how easily an asset can be sold or bought without affecting its price. In short, it is how liquid a market is.

Ether has better liquidity than bitcoin since it can be quickly bought and sold on exchanges. For example, Bitfinex, the world’s largest digital currency exchange allows you to convert ether to fiat currencies like USD and EUR.

This means that no matter where you are in the world, you can buy ether instantly. There are also many over-the-counter platforms for buying ether with fiat currency (like Coinbase), but these platforms tend to have higher fees and longer wait times.

6. Lower transaction fees:

Unlike bitcoin transactions which require miners to process them before they are added to a block, Ethereum transactions are processed by every node in a network simultaneously.

Because of this, Ethereum transactions cost much less than bitcoin transactions. For example, if you were to send $100 worth of bitcoins today, you would pay about $1 in transaction fees. However, if you were to send $100 worth of ether today, your fee would only be about 10 cents.

7. Allows users to create their own tokens:

One of Ethereum’s most interesting features is that it allows users to create their own tokens. Tokens created on top of Ethereum are called ERC20 tokens, after the standard protocol that developers use when building new tokens.

While there aren’t very many ERC20 tokens yet, expect more companies and startups to release their own ERC20 tokens in 2017 as ICOs become more popular and mainstream.

Conclusion

Over time, bitcoin may develop and upgrade more efficiently than Ethereum. For now, however, Ethereum remains a powerful option for blockchain developers. If you are working on a smart contract or other cutting-edge applications in finance or business and have an interest in using blockchain, you will likely be better served by Ethereum. You should consider what kind of distributed ledger will work best for your business before making a commitment one way or another.