The Beginner’s Guide
In this article, we will examine the differences between Tezos vs Ethereum coins. Tezos vs Ethereum are a few of the more popular smart contract platforms in the cryptocurrency space. Although Ethereum is the bigger of the two, Tezos is gaining ground and the project has received several high-profile partnerships recently.
Ethereum has a few key advantages over Tezos. The first is decentralization. Ethereum is generally considered the second most decentralized cryptocurrency after Bitcoin. A decentralized protocol is important because it reduces the chances of any organization censoring transactions or freezing accounts.
There are several major Ethereum organizations such as the Enterprise Ethereum Alliance and ConsenSys, but even these influential organizations do not have unlimited control over the network.
The second advantage of Ethereum is its large developer community. Ethereum has more developers than any other cryptocurrencies, or even more developers than Bitcoin. These developers voluntarily give their time to improve the protocol and create new features such as staking, which was recently released.
Having a large developer community is a significant advantage. Because bugs are fixed faster and new features are released regularly. A large community can also self-assemble. There are a number of technical documents for Ethereum that make it easy to build on. The community can also offer support to developers working with Ethereum for the first time.
Finally, Ethereum is the main DeFi. While other blockchains like Polkadot are also building a DeFi ecosystem, Ethereum currently has the largest decentralized finance product suite in the world.
Having all of these products is advantageous as they are interoperable. For example, dozens of different DeFi protocols all depend on Uniswap in some way. Even if another blockchain like Tezos starts building the DeFi ecosystem, it will not have the diversity of applications like Ethereum.
Advantages of Tezos
Probably the number one selling point for Tezos is that it is built with a self-modifying feature. The Tezos team explains it like this.
“Tezos is a self-modifying blockchain network that includes an on-chain mechanism to propose, select, test and enable protocol upgrades without the need for a hard fork.”
If you’re familiar with a traditional blockchain like Ethereum or Bitcoin, you know that it usually takes a hard fork to make a big change. The problem is that hard forks can be contentious and tear the network apart. In general, a hard fork is not an elegant way to upgrade a network.
The advantage of Tezos is that the network can be upgraded without a hard fork. What this provides is long-term stability. Anyone building on Tezos can rest assured that the network will not split, as with Bitcoin Cash with Bitcoin and Ethereum Classic with Ethereum.
This self-modifying feature was cited as one of the reasons why a large consortium of automakers decided to build on Tezos. BMW, Audi, Porsche and several other major automotive manufacturers have decided to use Tezos to verify the authenticity of the firmware installed in their cars.
In addition to supporting the self-switching feature, automakers also praised Tezos’ ability to clear significantly more transactions per second than Ethereum. Although Tezos is more centralized, the advantage of centralization is speed. For certain customers, such as automakers, fast transactions are more important than decentralization.
This may apply to other large companies as well. Perhaps the advantage of Tezos is that the blockchain appeals to large manufacturers and other companies who find speed more important than building on the most decentralized protocol.
Tezos Beats Ethereum in Gas Costs
Throughout the summer and fall of 2020, Ethereum experienced periods of extreme network congestion. On some days, Ethereum had so much traffic that even sending a simple transaction could cost as much as $5 to $10.
More complex transactions can cost $50 to $100 or more. This is bad because it makes Ethereum unusable for the average person. While some scaling solutions will come out on Ethereum, it is not clear that these solutions will fix the problem immediately.
Seizing an opportunity, Tezos recently rolled out the “Delphi” upgrade, which reduces the gas requirements for the execution of smart contracts. Tezos claims that in many cases gas needs can be reduced by up to 75%. In other words, running a smart contract will be 3 times cheaper than before.
High transaction speeds combined with low fees could make some Ethereum users and developers switch to Tezos. The longer Ethereum is congested and the higher the fees remain, the more people move to other chains like Tezos. This puts pressure on the Ethereum community to find a way to scale the blockchain.
Which Blockchain Is Better?
No matter what, there is no blockchain that will always be better. The best choice will depend on the changing needs of the user or developer.
If you want to be part of the largest DeFi ecosystem, that means Ethereum as no other cryptocurrency in the world has such a large decentralized finance movement. If decentralization and immutability are important, Ethereum is also the best choice. When a developer wants to build an application that cannot be closed, he builds on Ethereum.
On the other hand, Tezos is the better protocol if scalability and fast transaction speeds are a priority. Tezos’ self-modification is really cool as it eliminates hard forks.
It may take a few years or more before we see which smart contract platform is the long-term winner. Ethereum with its decentralized nature but slower speeds, or Tezos with its high-speed transactions and self-modifying protocol. Of course, both can appeal to different markets as they have different features. It doesn’t have to be one or the other.
We have come to the end of our Tezos vs Ethereum article.
Note: The information, comments and evaluations contained here are NOT in the Scope of Investment Consultancy. Keep following the SinceCoin.