Steem and Ethereum are not competitors. They have different use case and applications. Steem has much higher level of scalability compared to Ethereum but lacks decentralization. Below, I will discuss six major advantages of Ethereum over Steem:
Ethereum is far more decentralized compared to Steem. Steem blockchain is primarily controlled by 21 nodes run by witnesses who validate blocks. Ethereum on the other hand has thousands of nodes scattered around the world. Though there are a few hundred Steem nodes, the top 21 nodes are the strongest and have the most power. This makes Steem blockchain less decentralized than Ethereum blockchain.
Steem nodes are much less stable than Ethereum nodes. During the hardfork 20, Steem’s main top 21 nodes were down for a while. I don’t recall Ethereum ever having this kind of issue. Steem is still a beta software and it may contain bugs. After the hardfork 20, many bugs were found and Steem.io software and it was relaunched with bug fix patches.
Though Steem is an immutable blockchain, it still lacks the level of immutability provided in Ethereum. If top 21 Steem witnesses decided to mute something (delete something from the blockchain), technically, they would be able to do it but I don’t believe they would.
I trust that Steem witnesses / block validators won’t do something like that. But in Ethereum, transactions are immutable by default and can’t be reversed. They are permanently hardcoded in the blockchain. The only way to reverse them is a hard fork. Therefore, it is more immutable than Steem.
Ethereum is used by far more people than Steem. Ethereum is ranked number two in coinmarketcap.com. Steem isn’t even in the top 10 cryptocurrencies. Even though Steem has over 1 million accounts, its actual active users are much lower. And many users have multiple accounts. I myself have over 20 Steem accounts.
Ethereum has way higher liquidity compared to Steem. Exchanging large amounts of Ether won’t drop its price significantly. It is a better store of value due to this high level of volume and liquidity. Steem on the other hand is not a good store of value for investing hundreds of thousands of dollars. Manipulating Steem price is also much easier than Ethereum because it has low volume.
Ethereum supports smart contracts that can be deployed to the Ethereum blockchain to make a new token. Steem doesn’t support smart contracts (as of 31th October 2018 when this post was published). Steem is expected to support smart contracts but it hasn’t been launched yet. Steem developers have stated that they will launch smart contracts in March 2019.
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