Polygon Vs. Ethereum – What’s the Difference?
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Learning the differences when discussing Polygon (MATIC) vs Ethereum (ETH) is a great way to get a better grasp on the market. Interestingly, these protocols aren’t necessarily competition, but options to consider within the same ecosystem. Here's some insight into what makes Polygon and Ethereum both projects to watch in 2022.
What is Polygon?
Polygon operates as a layer 2 scaling solution built to provide Ethereum developers with more functionality and lower fees. The developers behind the platform envision the protocol as an internet of blockchains. Part of this strategy is to streamline the creation of new blockchains. Polygon provides multiple options for developers ranging from independent chains to subchains that leverage Ethereum’s security.
What is Ethereum?
Ethereum is one of the most successful cryptocurrencies of all time. Ethereum is the blockchain that hosts the cryptocurrency Ether (ETH). These items are often confused as the same thing. However, Ether is used to pay nodes for smart contract executions on the blockchain. It can also be used to send value internationally in a frictionless manner.
What Problems was Polygon Built to Alleviate?
Polygon was built in the hindsight of Ethereum. It was designed to help reduce some of the common pain points experienced by Ethereum developers. The protocol specifically tackles developer restrictions and high gas fees brought on by congestion. Polygon offers zero-gas transactions which is a huge plus for developers and users alike.
Ethereum developers have run into many limitations due to the network's configuration. Ethereum was an early contender in the market which means that it lacks many of today’s most advanced features. Polygon introduces a highly-customizable infrastructure combined with a scalable consensus algorithm to improve interoperability.
Lack of Security
Dapp developers have suffered from security concerns from day one. Polygon is an open-source network that enables users to create on top of its network. The protocol provides developers access to modular security features to improve their operations. It makes it easy for corporations to upgrade their security using blockchain options.
What Problems was Ethereum Built to Alleviate?
Like Polygon, Ethereum was created to improve on its predecessor. In Ethereum's case, this predecessor is Bitcoin. Ethereum added functionality to the blockchain ecosystem and improved Bitcoin’s sustainability and scalability. Bitcoin is capable of around 7 transactions per second. In comparison, Ethereum can handle 15-30 in its current state.
Ethereum’s developer Vitalik Buterin wanted to simplify the creation and management of decentralized applications. Dapps are special programs that are designed to operate on decentralized networks. As such, they leverage network nodes to handle the computations and validation of the network. Ethereum is home to thousands of Dapps currently.
How Does Polygon Work?
Polygon's Architecture is made up of multiple components. There are four layers that operate in tandem to complete the operations of the network. The first layer is the Ethereum layer. This component handles the implementation of EVM instances. This layer is responsible for staking, DeFi, and inter-blockchain communication.
The security layer is another component that developers can leverage to improve their creations. The security protocols allow users to select the ones that fit their specific network needs. These validation services can be set up to handle management and other vital functionalities.
Stand-alone chains are a critical part of the Polygon ecosystem. These networks are designed to service enterprise-grade clientele and businesses. These systems are scalable and secure. As such, they are perfect for startups seeking to leverage blockchain tech.
One of the coolest components of Polygon is its community governance system. MATIC token holders can stake their tokens to gain voting rights in the network's community governance system. Notably, subchains and blockchains built on Polygon can choose to use the community governance option or create their own alternative.
How Does Ethereum (ETH) Work?
Ethereum is a second-generation Proof-of-Work (PoW) blockchain. This designation means that it relies on community members called miners to remain valid. Miners accept gas payments to execute instances of the EVM (Ethereum Virtual Machine). They also secure returns for approving transactions.
Ethereum miners don’t use the same SHA-256 algorithm as Bitcoin. Instead, the Etash algorithm is used which requires less energy to keep the network secure. It also helped Ethereum to stave off mining centralization in its early days. However, today, there are high-powered ASIC miners built specifically for the network.
Ethereum 2.0 Upgrade
Ethereum is in the midst of its largest upgrade to date. The network will convert from a PoW network over to a Proof-of-Stake (PoS) network. This upgrade will reduce gas costs and provide the network with far more scalability. According to Ethereum reports, this upgrade will push Ethereum’s tps to 1,000 tps.
The maneuver will also open the door for ETH stakers. Currently, there are ETH staking options already available for users interested in securing the upgraded network. To qualify for an Ethereum staking node, you need to hold 32 ETH. Those who don’t have that many tokens can always join a mining pool to share in the rewards.
How to Buy Polygon (MATIC) and Ethereum (ETH)
Currently, both Polygon (MATIC) and Ethereum (ETH) are available for purchase on the following exchanges.
Uphold – This is one of the top exchanges for United States & UK residents that offers a wide range of cryptocurrencies. Germany & Netherlands are prohibited.
Uphold Disclaimer: Assets available on Uphold are subject to region. All investments and trading are risky and may result in the loss of capital. Cryptoassets are largely unregulated and are therefore not subject to protection.
Binance – Best for Australia, Singapore, UK, & USA residents. Canadian residents are prohibited.
Discount Code: EE59L0QP for 10% cashback off all trading fees for non-USA residents. USA residents: Trade $100 & Earn $10 in 30 days after account registration.
Kraken – Founded in 2011, Kraken is one of the most trusted names in the industry with over 9,000,000 users, and over $207 billion in quarterly trading volume.
They offer trading access to over 190 countries including Australia, Canada, Europe, and the USA. (Excluding New York & Washington state).
Driving Adoption for ETH Users
Both Ethereum and Polygon are popular projects that can help to improve your portfolio. Ethereum is the reigning champion in the DeFi market but it has seen some competition chip away at its crown due to congestion. Polygon helps to alleviate these issues for Ethereum users which makes the entire ecosystem stronger. As such, there is room for both networks to prosper.
To learn more, visit our Investing in Polygon and Investing in Ethereum guides.
David Hamilton is a full-time journalist and a long-time bitcoinist. He specializes in writing articles on the blockchain. His articles have been published in multiple bitcoin publications including Bitcoinlightning.com
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