The two most popular cryptocurrencies – Bitcoin and Ethereum – are often compared between each other. What is the difference between Bitcoin and Ethereum and what currency to invest into? We will find this out below.
Ethereum vs Bitcoin: The basics
Before we dive into finding an answer to the main question, let’s first find out what are those cryptocurrencies in their nature.
Ethereum’s white paper was released in 2013, and the project officially launched in 2015. Ethereum is an open-source, community-driven, decentralized project. Ethereum allows for an unlimited number of tokens.
The project ensures anonymity and security for its users. The aim of the project is to make financial services and commerce accessible for everyone. This is achieved by allowing the development of other cryptos and the execution of smart contracts on its platform.
Ether is used mainly for four purposes: It is traded as a digital currency on exchanges, held as an investment, used to purchase goods and services, and used on the Ethereum network to pay transaction fees.
Pros of Ethereum:
- Functionality beyond digital currency (decentralized applications and smart contracts)
- One of the largest developer communities
- The Ethereum platform processes transactions faster than Bitcoin
- Carbon footprint is reduced by 99.95%
Cons of Ethereum:
- High transaction fees
- Slow compared to alternative platforms
- Unlimited supply could dampen demand
Bitcoin was launched back in 2009 by the mysterious Satoshi Nakamoto. The currency promised to be a decentralized virtual alternative to fiat assets secured without government intervention. It was fulfilled quite successfully – feel free to use any crypto payment platform to check how Bitcoin payments work.
Bitcoin is not backed up by any physical value and the price of it depends solely on supply and demand. The currency is not the first attempt of an online currency launch yet the first successful one. The coin is a predecessor of every cryptocurrency project that emerged in the past decade.
There is a fixed amount of Bitcoins that can be minted at 21 million. As it will be reached, no more coins will be introduced.
Blockchain, the technology on which Bitcoin is based, is a secure system accessible for everybody. Crypto transactions happen between p2p crypto buy wallets using private keys to prove the transaction.
Pros of Bitcoin:
- Bitcoin is widely recognised and has the most liquidity
- Huge potential for growth
- The Blockchain technology is designed to protect users against fraud or identity theft
- Faster transaction speed than fiat currency
- The coin has a fixed supply, that’s what makes it rare therefore profitable for speculators
Cons of Bitcoin:
- High volatility
- Limited functionality
- Bad for the environment
- Bitcoin doesn’t provide total anonymity
Ethereum vs Bitcoin: Key differences
So how is Ethereum different from Bitcoin? Let’s find it out.
- Area of Application
Bitcoin was designed as an alternative to traditional currencies, a medium of exchange and a store of value. Whereas, Ethereum is a programmable blockchain that is applicable in numerous areas.
- Block time
Ethereum is much faster – it takes 15 minutes on average to validate one block, while for Bitcoin it is about 10 minutes.
One of the most interesting features of Bitcoin is its finitness – the cap is 21 million BTC. Whereas, the supply of Ethereum is infinite.
Ethereum vs Bitcoin: What is better?
The main advantage of Bitcoin over Ethereum is its regulatory clarity. There is still much speculation about whether cryptocurrencies are securities or not and the situation is much clearer with Bitcoin than Ethereum.
Either way, when choosing which coin to invest in, there is no wrong answer. Both options possess nice market liquidity, sustainable tokenomics, and mature ecosystems. Those are the factors that make both currencies attractive for investors seeking quality.
And why is Ethereum better than Bitcoin? Well, the answer is that Ethereum is programmable and that makes it more than just a cryptocurrency.
Ethereum vs Bitcoin: The conclusion
Bitcoin and Ethereum both increased their value since their release while being experimental projects and it comes with some problems that yet hasn’t been resolved.
If you have decided to invest in crypto, consider these top two currencies as a way to go. When choosing in which one it is better to invest, consider your goals as these two have completely different applications to them.
Bitcoin is the most popular cryptocurrency. If you’re looking for a cryptocurrency alternative to fiat, Bitcoin seems to be a good choice, as long as you’re prepared for the tremendous volatility.
Ethereum is more than a cryptocurrency – the network acts as a marketplace for users to buy and sell goods and decentralized applications. If you’re interested in more than a cryptocurrency, Ethereum might be a great choice.