The reason Bitcoin is secure but rigid, while Ethereum is flexible but congests, lies in the Accounting Model.
๐ธ 1. UTXO Model (Bitcoin) The Cash Mindset
Bitcoin does not store an Account Balance. Your wallet holds banknotes.
To send 2 BTC, you spend a whole 5 BTC note. The network sends 2 BTC to the receiver and returns 3 BTC as change to you.
Pros is High privacy, parallel processing.
Cons is Very hard to program complex Smart Contracts due to lack of global state.
๐ธ 2. Account Model (Ethereum) The Bank Mindset
Like a bank account. The Blockchain stores a Global Ledger stating Wallet A has 100 ETH.
To transfer, the system simply Subtracts from Wallet A and Adds to Wallet B. No change needed.
Pros is Intuitive logic, extremely easy to build Smart Contracts.
Cons is Sequential processing. Transactions must queue up to update the global state, leading to congestion and high gas fees.
๐น Bitcoin is optimized to be Money Secure, Private. Ethereum is optimized to be a Computer Flexible, Programmable. Forcing DeFi onto Bitcoin is like expecting paper cash to perform calculations.
Do you prefer the solidity and anonymity of UTXO or the convenience and versatility of Account Model?
News is for reference, not investment advice. Please read carefully before making a decision.
