Ethereum is said to play second fiddle to Bitcoin in the cryptocurrency arena. It has been compared by crypto enthusiasts as the Microsoft and Apple of the digital currency world which speaks volumes of how they are similar yet entirely different from one another. Both have seen the highest peaks in 2017. They are now considered as the two most popular decentralized digital cash in the market.
The values of both cryptocurrencies Erfahrungen sammeln möchte are not far from each other. Bitcoin has a total market capitalization of $147.3 billion while Ethereum has a total market cap of $84.2 billion.
This is a digital currency introduced in the market in October 2008 by an anonymous group or person in the name of Satoshi Nakamoto. Bitcoin is powered by a blockchain technology which is an open and secure ledger that stores and updates all transactions. Bitcoin miners confirm and validate transactions which then include them in blocks and then added to the blockchain. This becomes irreversible and permanent and available in public ledgers.
Launched in 2015, Ethereum is dubbed to be the largest decentralized platform that creates Smart Contracts and provide tokens not digital currencies. In effect, Ethereum is not a digital currency but a software platform. It also has its own cryptocurrency called Ether or ETH. This was the creation of Vitalik Buterin, a 24-year-old IT professional from Toronto, Canada. This also involves a team of experts namely Anthony Di Lorio, Mihai Alisie, Dr. Gavin Wood, Charles Hoskinson, and Joseph Lubin.
Ethereum vs. Bitcoin Mining – The Differences
Both platforms run on Blockchain technology but there is a difference in their respective algorithms. They have a different way of verifying blocks of information added to the public ledger.
With Bitcoin mining, the basis would be on the Proof of Work algorithm. The probability of mining a block would largely depend on computational work. The reward would be given to the first miner that was able to solve the cryptographic algorith for every block. The miners would also compete against each other in computational power using supercomputers.
On the flipside, Ethreum mining is based on the Proof of Stake algorithm. The probability of verifying a new block would depend of the number of coins or stake a person has. These miners or validators are given rewards called gas. With this digital currency, there are no mathematical puzzles that need to be solved as the creator of new block is determined by his stake thereshold. Compared to Bitcoin, Ethereum also has a speedier block time at an average of 25 seconds while Bitcoin has a block time of eight minutes.
Bitcoin Vs. Ethereum Prices – The Differences
Both Bitcoin and Ethereum had a remarkable market cap finish in 2017. ETH peaked at $1,400 from $10 with an astonishing 140x increase. BTC, on the other hand, has peaked to $20,000 in 2018 from just $900 or with a 20x increase.
However, in 2018, the direction of market prices went downwards. Both decreased at 70% for Bitcoin and 90% for Ethereum. In addition, ETH also lost to Ripple or XRP as the second leading cryptocurrency.
Ethereum Vs. Bitcoin Transactions
Ethereum transactions are faster and automatic while Bitcoin transactions are manual. The transactions speed for ETH is just a matter of seconds while Bitcoin would take minutes for each block.
Ether fuels up the Ethereum network transactions so it’s comparable to gas. Bitcoin is used for real-world and real-time transactions so it translates to the value of money.
Ether production is not limited and continuous. On the other hand, Bitcoin is limited to only 21,000,000 coins.
The Final Verdict – Ethereum Has the Ultimate Edge over Bitcoin
Ethereum is younger and more advanced than Bitcoin. Both works and runs on a decentralized platform so there is no central point which means it’s safer than any banks or traditional financial institutions out there. There is no way a hacker can access it because it has no central point of failure. A hacker will have to destabilize and hack as many companies or people in the blockchain to successfully hack into a network.
Smart contracts were introduced by Ethereum. This powers up applications that would never go offline and aren’t prone to unauthorized editing by third parties. This means you would always get paid on time and other contracts would be automatically set once conditions are met. The possibilities with Ethereum are limitless because you can use this in any industrial applications and contracts such as for e-commerce, banking systems, real estate and car dealerships, and email system; to name some.
Bitcoin and Ethereum have different goals and uses. Bitcoin is used for payments and financial transactions while Ethereum enables users to build applications that can be used for different transactions. It has a broader spectrum and concept compared to Bitcoin which is used for manual payments.
While Bitcoin is more liquide because of its limited coin suypply, Ethereum has multilevel uses and advanced and newer technology that offer smart contracts and other applications that can be used for both business and individual purposes.
Both Bitcoin and Ethereum run on blockchain technology which is constantly getting updates however Ethereum seems to round up as the better option because of these main points:
- Apart from being versatile, Ethereum clearly has more uses because smart contracts can be used for more than just payments.
- Ethereum operates on a more advanced version of blockchain technology which is able to offer smart contracts and can fix issues.
- Ethereum has just been released in 2015. Compared to Bitcoin being introduced in 2009, Bitcoin is newer and offer more advanced features and developments than the latter.
- Bitcoin transaction fees are more expensive than Ethereum.
- Transactions or payments are automated or are processed at a much quicker rate with Ethereum than Bitcoin.
Bitcoin and Ethereum aren’t rivals and it was not meant to be just an alternative to Bitcoin but it can be tied up to further optimize each other’s strengths. Major companies like Intel and Microsoft are now accepting Ether mode of payment. They could very well exist and thrive together because of two different concepts. However, if you choose only one, Ethereum would definitely dominate the market because it’s flexible and have many uses or applications. While Bitcoin was the first mover and had good positioning, Ethereum has the biggest potential because it’s both a store of value and can also provide smart contracts.