The two largest cryptocurrencies, Bitcoin and Ethereum, are often compared and the debate over which is the better network is a never-ending one. While each has its own set of advantages, they also have certain inherent challenges, one of which being scalability. While Lightning Network, a layer 2 payment protocol built on top of Bitcoin, addresses this challenge, ETH 2.0 is Ethereum’s answer to the same.
Bitcoin Lightning Network on the rise
Recently, the Lightning Network (LN) reached new heights as it crossed the 25k node mark. The network is becoming stronger since participation is increasing on LN, which is also visible on the network itself. The total number of Bitcoin inside the channels reached 2370.588 BTC, which is worth almost $111.5 million. This helps in creating more liquidity on the network.
Furthermore, network utilisation has increased at an astounding rate in the last four months, with 63k unique channels and 4.6k recurrent channels. However, these figures are still relatively lower than those required for BTC to become a financial instrument. Ethereum thrives in this area.
Is ETH 2.0 for the win?
Ethereum doesn’t have a Layer 2 solution for scalability as yet. The network hopes that with ETH 2.0, it will be easier to address this issue. The difference here comes from the fact that ETH has more adoptees than BTC. Over 7.1 million ETH ($23 billion) is currently pledged in ETH 2.0 deposit contracts, which pales in comparison to LN’s total BTC presence of 2.3k.
Secondly, ETH has a more concrete user base. Despite the fact that Bitcoin has 869 million addresses, only 4.3 percent (38 million) of them have funds in them. On the other hand, ETH has only 189 M addresses but at least 31% of them hold some balance.
In terms of transaction speed, LN (25 million TPS) has an advantage over ETH 2.0. But in order to compete, its steady progress needs to pick up the pace. With the likes of Cardano joining the race, this is more important than ever.
