Learn Cryptocurrency
8 Feb 2022

Polygon vs Ethereum: What’s the Difference?

Devansh Sinhal

Polygon and Ethereum are two of the most popular cryptocurrencies out there. While Ethereum ranks #2, right after Bitcoin, Polygon ranks a little lower. However, both of them feature in the list of the top 15 cryptocurrencies by market capitalization. Both currencies and blockchain networks have their own unique functionalities and serve unique purposes in the crypto world.

In this article, we will explore what Ethereum and Polygon are (in that order), their utilities, and the key differences between the two blockchain platforms.

Let’s get right into it!

Key takeaways

  • Ethereum is a platform that allows developers to unlock the true potential of decentralized money, and build decentralized applications and code smart contracts.
  • Polygon, on the other hand, is an interoperability protocol as well as a framework that works on the Ethereum blockchain.
  • Polygon and Ethereum differ mainly in relation to their functionality, market cap, transaction speeds, gas fees, scalability, and consensus algorithms.

What is Ethereum?

Ethereum is one of the biggest blockchain platforms in the world. The network is supported by its native token, ether (ETH), and is one of the most versatile and functional blockchain systems in the world.

Ethereum is not just a store of value like other cryptos; it is a platform that allows developers to unlock the true potential of decentralized money, and build decentralized applications and code smart contracts. A smart contract is a permissionless program that gets executed by leveraging the blockchain. Smart contracts remove intermediaries from financial and other transactions, making the transaction more efficient for transacting parties. Today, they are being used for a wide range of applicationsfrom the trading of Non-Fungible Tokens (NFTs) on OpenSea, to the functioning of decentralized crypto exchanges like UniSwap.

Developers can also use the network to build other tokens on top of it. These tokens, called ERC20 tokens, are fully functional cryptocurrencies used for specific purposes. The only difference is that they don’t have their own blockchain network; instead, they use Ethereum’s network to verify transactions, and leverage Ethereum’s security and immutability to their advantage. Some popular ERC20 tokens are Decentraland’s MANA), Tether (USDT), and Shiba Inu (SHIB).

You can buy Ethereum directly on CoinSwitch!

What is Polygon (MATIC)?

Polygon, on the other hand, is an interoperability protocol as well as a framework that works on the Ethereum blockchain. It is also an ERC20 token, which means that it uses Ethereum’s network to enhance its immutability and keep the blockchain running for its users.

Polygon in itself is a very functional token. It was created to solve the problems Ethereum was facing in its network in a scalable and efficient manner. For example, since Ethereum is so functional, it caters to a huge network of users. As a result of this, there is a huge demand for verification, and Ethereum’s networks often get heavily congested, resulting in higher fees and delays in verification.

Polygon aims to solve this problem by using sidechains on the Ethereum network to divert traffic. It provides a framework for other blockchains to interact with it. This is the reason why Polygon is also known as a Layer-2 aggregator; it aims to create an ecosystem of Ethereum and its tokens where they can all work smoothly with one another and incorporate useful aspects from other blockchains.

You can buy Polygon directly on CoinSwitch Kuber here.

Differences Between Polygon and Ethereum

Polygon vs Ethereum

Polygon and Ethereum differ mainly in relation to their functionality, market cap, transaction speeds, gas fees, scalability, and consensus algorithms. Here are the main differences between the two as blockchain networks, and as cryptocurrencies:

Polygon (MATIC) Ethereum
Polygon is ranked #14 in the list of top cryptocurrencies by market cap. At the moment, it is worth $11.5 billion. Ethereum is the second-largest crypto after Bitcoin. At the moment, it is worth more than $320 billion.
Polygon is an ERC20 token that is based on Ethereum. Ethereum is the mother blockchain that enables the functioning of Polygon.
Polygon enables interoperability between Ethereum and other blockchains, providing scalability. Ethereum acts as a development platform for decentralized products like NFTs and dApps.
Polygon is a Proof of Stake (PoS) blockchain network. Ethereum is still a Proof of Work (PoW) blockchain network (although Ethereum 2.0 is not that far away).
MATIC tokens can be staked to earn regular rewards. ETH tokens can’t be staked directly, yet.
The average network fees for Polygon stood at an average of $0.002 in 2021. The median fee for ETH transactions currently stands at close to $15.

Polygon vs Ethereum: Growth Comparison

Polygon (MATIC), just like other cryptocurrencies, saw its highest growth rate in 2021; the coin rose from $0.01 on 1 January 2021 to its highest level of $2.92 on 27 December, recording a 29,000% increase in less than a year!

Polygon has also been a part of several fundamental developments. Recently, it also announced the creation of its very own Decentralized Automated Organization (DAO), which aims to form committees promoting discussion between projects like Aave, Sushi, and QuickSwap.

Ethereum, on the other hand, has shown modest growth levels. It delivered a gain of more than 450% in one year. So if you had bought $1,000 of ETH at the start of the year, you’d have more than $5,400 at the end of it. While the growth rates are not as phenomenal as Polygon’s, many people aren’t disappointed considering how fundamentally strong ETH actually is. Compared to Polygon, which is still developing at a rapid pace, Ethereum has already been established as a reliable network to a great extent.

Hence, the risk-adjusted returns for both ETH and MATIC have been far from disappointing in 2021. Experts predict that both coins have the potential to grow even more in the long run, especially as more research and development takes root.

Wrap-Up

Ethereum and Polygon are both excellent cryptocurrencies, both fundamentally and technically. As cryptocurrencies themselves get adopted more and more in our dynamic financial world, there’s no doubt that these two coins will reflect that growth in their prices as well.

Frequently Asked Questions

How do you convert a Polygon (MATIC) coin to ETH?

You can convert your MATIC coins to ETH directly on CoinSwitch Kuber! Simply log into our app, sell your MATIC for INR on the marketplace, and you are set to buy ETH instantly! Click here to convert MATIC to INR directly, or ETH to INR!

Want to buy Polygon MATIC in India? Do it on CoinSwitch!

Is Polygon faster than Ethereum?

Polygon was created to make transactions faster for Ethereum clients. The average time for Polygon transactions is 4 minutes on average, making it much quicker than Ethereum which takes 10 minutes.

Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.

writer

Devansh Sinhal

Content Writer

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