As things stand at the moment, the two biggest cryptocurrencies are Bitcoin and Ethereum. However, the big question is, is BTC or ETH a worthy investment? It’s no longer news that investors take special interest in cryptocurrencies.
Ethereum and Bitcoin share almost the same characteristics in many ways: both are digital currencies traded through online exchanges and kept in different types of crypto wallets. They are decentralized and thus cannot be issued or controlled by a central bank or any authority. However, there are pertinent differences in the two cryptocurrencies. In this article, we will therefore be comparing and contrasting Bitcoin and Ethereum.
Bitcoin vs. Ethereum: Which Is Better?
Bitcoin came into existence in 2009 and was invented by Satoshi Nakamoto whose existence remains a mystery. It is a digital currency that is decentralized. Bitcoin was never the first attempt at a digital currency; however, it is the most successful cryptocurrency as at now. The payments are secured with cryptography and one thing that stands bitcoin out is, it masks the identity of the sender and receiver.
After a period of time, the idea of a virtual currency has been constantly gaining acceptance among regulating bodies. Bitcoin’s transaction fee is also very low.
Ethereum was created in 2015 by Vitalik Buterin. It is a global, decentralized system that is also not controlled by any single governing entity. ETH is also used to build and deeply decentralized applications whose back-end code is placed in a distributed peer-to-peer network.
Bitcoin Vs. Ethereum: History
The inception of Bitcoin can be traced to 2008. The domain Bitcoin.org was created by someone unknown. Things started to fall in place and after a period of time, Satoshi Nakamoto was a household name.
In 2014, Buterin alongside other founders of Ethereum started a campaign where Ether was sold to kick-start their vision. The first actual creation of Ethereum was launched in 2015.
Bitcoin is the first ever cryptocurrency and a money-transfer system, built on and supported by a distributed public ledger technology called the Blockchain.
Ethereum took the technology behind Bitcoin and expanded its capabilities. It is a totally different network with its own internet browser, coding language and payment system. Majorly, it enables users create decentralized applications on Ethereum’s Blockchain.
Ethereum allows the deployment of smart contracts and decentralized applications to be run without interference, fraud or crash. Ethereum is majorly used as a digital currency on exchanges and it is used on the eth network to run applications.
Bitcoin Vs. Ethereum
Bitcoin is the most popular and well-known cryptocurrency in the world. It has the largest market cap among all the digital currencies. As opposed to BTC, ETH did not have the big effect that BTC had. However, the creator of ETH took cues from BTC and created various functions based on BTC. As at now, Ethereum is the second most popular digital currency in the world.
What Is The Difference Between Ethereum and Bitcoin?
Although both BTC and ETH networks are run by the concept of distributed ledgers and cryptography, their differences abound. Transactions on Ethereum network almost usually contains executable code, and data for Bitcoin network transactions are mainly for keeping notes. Key differences between them are:
– Bitcoin trades in cryptocurrency. Ethereum provides different methods of exchange; cryptocurrency inclusive.
– They both have different security systems. Ethereum makes use of ‘proof of stake’ while Bitcoin makes use of ‘Proof of Work’.
– Bitcoin allows only censor-proof transactions to take place while Ethereum allows transactions with permission or no permission.
– It is said that by the year 2021, only half of ETH coins would have been mined while so much bitcoin would have been mined.
Common Myths vs Facts About Bitcoin and Ethereum
1. Myth: BTC and ETH are currencies and should be evaluated by the value the give through money.
Fact: BTC and ETH are cryptocurrencies and should be evaluated by the value they are likely to give.
2. Myth: Bitcoin vs Ethereum is a zero-sum game.
Fact: Bitcoin and Ethereum work hand in hand for each other and asset diversification minimizes the risk.
Despite the fact that Ethereum hopes to be the solution to all cases of blockchain, it is still growing. As opposed to BTC, ETH is still taking in the pains and struggles that come with growing. This cannot exactly be said about Bitcoin.
There have been absurd fluctuations in the price of ETH and the cryptocurrency added over 13,000 % in 2017. While this is impressive, the weird fluctuations make investors careful.
$50 Million Ether was stolen by an unknown hacker which still makes us question the security of Ethereum. This also led to a division within the Ethereum society and two blockchains were started: Ethereum (ETH) and Ethereum Classic (ETC).
Disclaimer: This article is not a financial advice and it doesn’t seek to suggest an investment in any of the two. Either or both BTC and ETH values could drop to zero.
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