Ethereum vs Bitcoin: What are the Differences & Which is Better?

Thanks to its market-leading origins, the token has remained number one. At the time of writing, Bitcoin’s market cap has grown to over $1 trillion and has outpaced the growth of all other coins. Due to lower memory requirements, Bitcoin mining is compatible with ASIC (Application Specific Integrated Circuit) devices, rather than standard computer hardware. ASICs are specialized hardware devices that are tailored to mining Bitcoin and other cryptocurrencies. ASIC devices are expensive, which limits them to larger centralized organizations.

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• Bitcoin was created primarily as a decentralized digital currency, aiming to serve as a peer-to-peer electronic cash system that allows individuals to send and receive value without the need for a central authority.
• Another positive to Bitcoin’s case is the approval of spot Bitcoin ETFs by the United States Securities and Exchange Commission (SEC) which led to billions in traditional investments.
• Ethereum is a programmable blockchain that finds application in numerous areas, including DeFi, smart contracts, and NFTs.
• Since ethereum’s launch in 2015, there’s no question that bitcoin and ETH have been spectacular investments.
• Bitcoin, on the other hand, has implemented the Segregated Witness (SegWit) upgrade and is developing a layer-two scaling solution called the Lightning Network.
• Ethereum on the other hand is a network built for the development of decentralized applications (dapps).

Bitcoin has a limited supply of 21 million coins, which is designed to ensure that the value of each coin is protected and can increase over time as demand grows. The process of generating new bitcoins is called mining, and it involves solving complex mathematical equations using specialized computer hardware. For example, a system called Rootstock is being developed as an “attachment” for the Bitcoin blockchain, which allows smart contract operations to occur off-chain. This could one day allow for dapps to be built that are backed by the Bitcoin network, very similar to what we’ve seen develop with Ethereum. With further technical upgrades, applications may be built to run on the Bitcoin blockchain giving it some of the functionality that smart contracts bring to Ethereum. Bitcoin has dominated the cryptocurrency markets since its inception in 2009 and was for a while the only option for cryptocurrency investors.

Should I buy Bitcoin or Ethereum?

Although Ethereum remains the largest decentralized network in terms of smart contracts, its token ETH has yet to tap global adoption on the same wave as Bitcoin in recent years. Most users point to Bitcoin as a store of value attracting retail and institutional investors amid a change in macroeconomic factors. The cryptocurrency has seen rapid growth in its blockchain and value since its 2015 launch.

Best Cryptocurrency Exchanges for BTC and ETH

The dynamic duo have common characteristics but also bear significant differences. Through these applications, Bitcoin and Ethereum are pioneering new financial paradigms and providing innovative solutions to longstanding problems across various industries. Their respective coins, BTC and ETH, Bitcoin vs. Ethereum are similar in that they are both subject to crypto volatility, but BTC is much more valuable than ETH. BTC is priced higher than ETH, reaching almost $US73,000 in March 2024. ETH, on the other hand, peaked at around $US4800 in November 2021 and is currently trading at around $US3,800.

Performance of BTC vs. ETH

Ethereum and Bitcoin trade heavily on centralized cryptocurrency exchanges, and market forces determine their values. Since everyone can see identical copies of the Bitcoin blockchain, nobody can copy and paste their digital money and spend it twice. Doctoring one transaction is hard enough, but you’d also have to change every subsequent transaction since each one references its forerunners. Bitcoin was developed solely to facilitate decentralised payments, allowing people to send and receive payments without an intermediary such as a bank. Ethereum, on the other hand, was designed to do more than just send and receive ETH. While Ethereum does enable payments using its internal ETH cryptocurrency, its scope is much broader than bitcoin’s—by design.

• And with Ethereum, things can get even more wild, thanks to decentralized finance (DeFi) protocols.
• Proof of Work (PoW) is a consensus mechanism that requires miners to compete to solve complex mathematical problems to verify transactions and add new blocks to a blockchain.
• Investment strategies for Bitcoin often focus on its value as a digital store of wealth, with methods like buying and holding or investing through Bitcoin ETFs.
• Contact the product issuer directly for a copy of the PDS, TMD and other documentation.
• Bitcoin is a peer-to-peer virtual currency designed as an alternative to traditional or fiat money.
• Any time you carry out a transaction with either Ethereum or Bitcoin, you’ll be charged an amount that helps pay for the network’s technology.

What’s the difference between Bitcoin and Ethereum?

Recommended ReadingA Beginners Guide to Mining Cryptocurrencies on the Mac

Bitcoin was developed as a solution to the debasement of national fiat currencies and an alternative to a centralized permissioned financial system. Ethereum’s superior support for advanced functionality like smart contracts makes it more versatile for constructing decentralized applications, whereas bitcoin’s scripting language is comparatively limited. On the other side, Ethereum’s transition to a Proof of Stake (PoS) consensus mechanism markedly reduced its energy consumption. By eliminating the need for energy-intensive mining, Ethereum’s energy usage decreased by an estimated 99%, positioning it as a more environmentally friendly blockchain network. This shift not only addressed the growing concerns around the carbon footprint of cryptocurrency operations but also set a precedent for other blockchain networks to consider more sustainable consensus mechanisms.

Comparing Ethereum vs Bitcoin: What are the Differences?

Bitcoin price vs. ethereum price