Bitcoin vs. Ethereum: What’s the Difference?

What is Bitcoin?
What is Ethereum?
Similarities Between Bitcoin and Ethereum
Differences Between Bitcoin and Ethereum
bitcoin-and-ethereum-pros-and-cons
Ethereum and Bitcoin Aren’t Competitors

What is Bitcoin?

Bitcoin is a cryptocurrency released in January 2009. It is a virtual currency that acts just like money or other forms of money used to buy something or to make payments. An individual or a group of individuals known as Satoshi Nakamoto created Bitcoin. Bitcoin is secure as it is based on Cryptography. This blogs talk about the difference between Ethereum vs bitcoin.

Since the development of Bitcoin, it is the most popular cryptocurrency all over the world. The popularity of Bitcoin led to the development of other cryptocurrencies such as Ethereum, Shiba Inu, and DOGE.

A public ledger is used to record all the transactions made using Bitcoin worldwide. Each transaction of Bitcoin is made public on the network and also shared from node to node. It is very similar to the physical coins that we keep in our wallets. Bitcoins can also be converted into cash. There are some platforms that allow you to pay using bitcoins.

Check out this Bitcoin course to learn more about Bitcoin.

What is Ethereum?

Ethereum is also based on blockchain technology. Ethereum was launched in 2015 and it became one of the largest and most well-known cryptocurrencies. Vitalik Buterin created this cryptocurrency. You can buy ether tokens provided by Ethereum. It works just like Bitcoin and allows you to make payments and use it just like the physical money.

Among cryptocurrencies, Ethereum comes in the second number after Bitcoin in its market capitalization.

Ethereum is designed in such a way that it can be scaled, decentralized, and programmable too. It allows the creation of applications and deployments on its network. This is also a reason most developers choose the Ethereum blockchain for creating applications. Even industries also use this platform.

Similarities Between Bitcoin and Ethereum

There are some similarities between Ethereum and Bitcoin like both these cryptocurrencies use blockchains as proof of work for the validation of transactions.

Both Bitcoin and Ethereum are similar in network adoption of customers.
They are similar because both cryptocurrencies are non-centrally issued.
They are operated using proof-of-work consensus.
Both the assets display the ledger publicly that can be stored in digital wallets.
Both the cryptocurrencies have limited supply where bitcoin has no more than 21 million coins and Ether comes with an inflation rate of 4%.
Due to their widespread adoption of networks, they are strong enough to stay in power over other cryptocurrencies or blockchain industries.

Differences Between Bitcoin and Ethereum

However both Bitcoin and Ethereum are cryptocurrencies, but still, there are some differences between them. The one thing about Bitcoin is the reason behind its creation. It was created to give people a way to transfer value or some equivalent amount of tokens without any interference from the central bank.

The reason behind the creation of Ethereum is to allow unlimited functions or transactions for small contracts.

Ethereum was built to provide a platform to monetize operations of the smart contracts and decentralized applications built on Ethereum. Ethereum processes up to 15 transactions in a second which makes it faster than Bitcoin where Bitcoin only processes about 3-5 transactions.

Another difference between Ethereum vs Bitcoin is that it limits the block size. Bitcoin blockchain takes around 10 minutes to mine a new block of it while Ethereum doesn’t have any block limit. For Ethereum, it’s up to miners to decide how many transactions they want to put into a block. The maximum number of transactions Ethereum can handle currently is 15 transactions per second.

What is the main difference in application between Bitcoin and Ethereum?

The main difference between Ethereum vs Bitcoin is that Bitcoin is a cryptocurrency whereas Ethereum is a ledger-based technology that allows the developers to create new applications and programs.

Both the cryptocurrencies are based on Blockchain technology but Ethereum is more robust. Ethereum is a great innovation due to its application for building new apps on top of this technology.

However, both cryptocurrencies are designed as an alternative to each other. But one thing that is not comparable about Ethereum is that it is a programmable blockchain and includes smart contracts, NFTs, and DeFi.

Differences Between Bitcoin and Ethereum

Why is Bitcoin compared to digital gold and Ethereum to digital silver?

There’s a common reason for this question that bitcoin was the very first cryptocurrency that exceeded $1 trillion in market capitalization even if it has a limited supply. That’s the reason it was compared to digital gold where the market capitalization is much more than its supply.

The same fundamental was applied to Ethereum and digital silver which is the second-largest cryptocurrency with a large market capitalization and just like the precious metal, Silver, it has other applications too.

What are Bitcoin’s and Ethereum’s shares of the crypto market?

As of now, the Market Capitalization of Bitcoin for June 2022 is less than $600 Billion with a volume of $44.8 Million bitcoins mined. However, In April 2021 the market cap of Bitcoin was around $1000 Billion.

Whereas the market cap of Ethereum is $135.3 Billion with a volume of $24.5 Million Ether.

Bitcoin and Ethereum: Pros and Cons

Pros of Bitcoin:

Transparency and Anonymity
Accessibility
Potential to give high returns
Most popular crypto worldwide

Cons of Bitcoin:

Volatility
Irreversible
No regulations led by the government
Limited use only

Pros of Ethereum:

The cost per coin is not much
Large developer community
Not only a cryptocurrency but more than that
Ethereum is a decentralized crypto
More secure than other cryptos

Cons of Ethereum:

Not much popular
Scalability is not well
Uses the complicated programming language
Investments can be risky

Best Cryptocurrency Exchanges for BTC and ETH

There are various places where you can purchase both cryptos Bitcoin and Ethereum. Some platforms are so useful that they provide the trading option for both the stocks and crypto in the same place. For an instance, you can purchase Apple stocks or buy bitcoins on a single platform. These platforms include Webull and Robinhood which let their users invest in stocks as well as crypto. Other platforms such as CoinSwitch, WazirX, and CoinDCX are the crypto-dedicated platforms that give you the option to invest in Cryptocurrency only.

Ethereum and Bitcoin Aren’t Competitors

Most people think that Bitcoin and Ethereum are competitors in the market which is not true. Because if you make deep research on these cryptocurrencies, you will come to know about what this blockchain technology is and how it affected our lives since its development.

So, it becomes essential to know that both Bitcoin and Ethereum are different ideas where Bitcoin is a store of value and Ethereum is a decentralized platform to create applications and for their deployment. Both these cryptocurrencies run on blockchain technology to make their network more secure.

Frequently Asked Questions

Is Ethereum or Bitcoin a better investment?

Bitcoin is just like a digital gold whereas Ethereum is a decentralized digital computer. Both the cryptos are based on the same technology blockchain. It also depends on the risk factor of the market for each investor. Both the cryptocurrencies have potential to grow their value globally.
Choosing the best option for investment between Bitcoin and Ethereum also depends on the requirements, risk tolerance, and financial goals of any investor. And the choice is completely up to you keeping in mind these factors.

Will Ethereum be worth more than Bitcoin?

The value of any crypto comes with the network it created and what that network can protect. So in the case of Ethereum, its value comes with the network it can create and for Bitcoin, the value comes from what the network can protect.

Which crypto will boom in 2022?

According to some Crypto experts, some cryptos gained popularity among the major players – Bitcoin and Ethereum. The popularity of Dogecoin (DOGE), Chronology (CRNO), and KLAYTN (KLAY) are the cryptocurrencies that might boom in 2022 with unpredictable returns.

Should I buy Ethereum 2022?

Ethereum is at its lowest price now from early 2021 at $1765. Due to the large drop in the crypto-verse Ethereum dropped by over 15.68%. Due to this, Ethereum’s upgraded consensus mechanism is about to come soon. This upgraded plan will reduce the network fees. So, it can be a better choice to invest in Ethereum in June 2022.

Can Ethereum ever crash?

If we look at our present situation, the crypto market has crashed by more than 15% within a single day and still going downside. So is going with Ethereum as well. The cryptocurrency crashed by over 15.68% on June 12, 2022.

Can Ethereum reach 50k?

Yes, there can be a possibility that Ethereum might reach $50k keeping the several factors as constraints like the blockchain technology, cryptocurrency space, volume of Ethereum crypto, price of several stakeholders, etc.

Should I convert my Bitcoin to Ethereum?

If you are thinking to convert your Bitcoin to Ethereum, then you should have both cryptocurrencies in your portfolio as investments. If you believe Ethereum is going to boom in future and it may head over the Bitcoin, then you can do that. You can convert your Bitcoin to Ethereum. But the decision should be made considering several factors such as the current price of these cryptos, the prediction for the future from the graph, and the volume of these cryptos.