Bitcoin Vs Ethereum
Anyone who knows cryptocurrency must have also heard about Bitcoin (BTC) and Ethereum(ETH). By now, BTC and ETH are synonymous with cryptocurrency. BTC and ETH coins are the most popular crypto assets bought in the crypto market. They are considered the torchbearers of the crypto industry, and their applications have been revolutionary. They are changing the way we interpret computing, money, and decentralization.
BTC and ETH combined have more than 50% of the crypto market share. This article will analyze both cryptocurrencies and discuss which of the two is the better investment option.
What is Bitcoin?
Satoshi Nakamoto invented Bitcoin in 2009. Bitcoin was invented after the global financial crisis of 2008 and is the first cryptocurrency ever to be launched. A need for a decentralized solution to money arose as several economies spiraled downward in the wake of the 2008 financial crisis.
Bitcoin was created as an alternative to fiat currencies. It was first proposed as another way to store wealth and as a platform for exchange. Governments can print fiat money at will as fiat currencies are not backed by any commodity. Bitcoin is an alternate currency that is non-corruptible, finite, and valuable. Bitcoin price is controlled by the dynamics of the crypto market. No centralized entity can devalue Bitcoin.
The Bitcoin blockchain is an open-source ledger that operates on Bitcoin. Anyone around the world can view all the transactions on the Bitcoin Blockchain. Bitcoin transactions can never be erased once they are recorded. Nodes are mining centers that share Bitcoin across the globe. The system is corruption-free as every transaction on the Bitcoin blockchain is monitored and verified by miners.
What is Ethereum?
Vitalik Buterin invented Ether (ETH) in 2014. Ethereum applications were revolutionary when first introduced, and they became popular in a short time. Currently, Ethereum market capitalization ranks second, only behind Bitcoin. The Ethereum blockchain runs on ether and has applications beyond just being a currency.
Ether was primarily invented to enable smart contract agreements despite having many other products and services. Third-party verification is not required for a smart contract as these are code-enabled agreements. Predefined rules are agreed upon by all parties in a smart contract. Ethereum has a wide range of applications. Some of the popular applications of Ethereum are NFT minting, Web 3.0, and decentralized finance.
Metamask and Open sea are some of the famous platforms that use the Ethereum blockchain network for completing transactions. The latest update of Ethereum has been in the news lately, known as the Ethereum Merge. The merge is Ethereum moving from a proof-of-work system to a proof-of-stake consensus model. This transition will make the Ethereum blockchain hyper-efficient.
Difference between Bitcoin and Ethereum.
A transaction fee is paid to crypto miners as a reward for mining cryptocurrencies. This fee can be easily confused with the transaction fee charged by a crypto exchange. Transaction fees are a vital component of the blockchain network as they are incentives for crypto miners to verify transactions on the blockchain. Spammers can be avoided on blockchain networks by using transaction fees.
Network congestion, block size, and transaction throughput determines the price of transaction fees. As of September 12th, the Bitcoin transaction fee is $1.098. The Ethereum transaction fee is $0.8585.
Bitcoin and Ethereum volume
Twenty-one million coins is the maximum bitcoin circulating supply. Nineteen million bitcoin coins are in circulation currently. The last ever Bitcoin will be mined in the year 2140. Ethereum does not have a cap on its circulating supply. Currently, Ethereum’s circulating supply is 121 million coins. Ethereum is an application-based crypto coin, whereas Bitcoin is a scarcity-driven wealth, similar to gold.
Being an alternative currency is the purpose of Bitcoin (BTC). Applications are not run on a bitcoin blockchain. Bitcoin transaction details are stored in its blockchain. On the other hand, many applications run on the Ethereum blockchain. Currently, Ethereum is the most widely used blockchain in the crypto industry. Some of the applications that use the ETH blockchain are mentioned below.
- Brave Browser: It is a modern web browser that blocks all third-party applications and emphasizes user privacy.
- Metamask: A web extension that allows you to connect to the Ethereum blockchain network.
- Rarible: An NFT marketplace run by a community.
- ETH name service: Users can create personalized ETH wallet addresses using ENS.
These are only some of the many thousands of applications that run on the ETH blockchain network.
Difference between bitcoin and Ethereum mining
A Proof of work (POW) system is used to mine BTC. ETH is still using the proof of work model to complete transactions, but they are set to transition to a proof of stake (POS) model. This transition event is popularly known as the Ethereum Merge. It is one of the most awaited crypto events for 2022.
Bitcoin’s primary purpose is to serve as an alternative source of money. It was invented because of the belief that decentralized networks perform better compared to centralized systems. Ethereum allows users to enable smart contracts and other D-Apps rather than being just an alternative source of money.
Currently, Bitcoin has a total market capitalization of $415.7 billion and is ranked first in the crypto market. Ethereum has a market capitalization of $217 billion and is ranked second in the market.
It is tough to decide which crypto is the better investment option between Bitcoin and Ethereum. For investors who believe BTC is the future of money, Bitcoin could be a better choice. Bitcoin applications range from simplifying Forex markets to everyday transactions. Ethereum is the choice for users who want to build new digital ecosystems. ETH is more suited to users who believe in Web 3.0 and D-apps. The entire crypto world is hoping that the Ethereum merge is executed smoothly. Crypto investors need to have a thorough understanding and perform detailed research on crypto coins before deciding to buy or sell.