The ratio in the chart above divides the price of Ether by the price of Bitcoin and represents the amount of Bitcoin it takes to buy 1 Ether.
When the ratio rises, Ether is outperforming Bitcoin - and when it falls, Ether is underperforming.
As of 2021, Ether is the second-largest cryptocurrency by market capitalization after Bitcoin. It is the currency of the Ethereum blockchain and is often referred to as the "fuel" of the decentralized applications ("dapps") that are running on the network. Ethereum is the most popular blockchain for running smart contracts and dapps. In fact, as of August 2021, 116 out of the top 200 tokens (as measured by market capitalization) are located on the Ethereum blockchain. They include stablecoins, DeFi projects and tokens of decentralized exchanges.
In contrast to Bitcoin, which has a maximum total supply of 21 million BTC, there is an unlimited supply of ETH with an annual limit of 18 million. New blocks are mined in the Bitcoin network approximately every 10 minutes, whereas on the Ethereum platform a new block is created about every 15 seconds.
Ethereum, like Bitcoin, currently uses a consensus mechanism called Proof-of-work (PoW). This allows the nodes of the Ethereum network to agree on the state of all information recorded on the blockchain, and prevents certain kinds of economic attacks. In PoW so called "miners" compete in solving a math problem and get rewarded in newly minted coins. However, Ethereum plans in its roadmap to switch to Proof-of-Stake (PoS), where "validators" (rather than miners) who staked their ether tokens, process all new transactions. Unlike in a PoW system, validators don't need to use significant amounts of computational power because they're selected at random taking into account the staked amount of Ether.
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