Today, Bitcoin and Ethereum are more like Coke and Pepsi competing in the crypto space. Still, definitely, there’s a big difference between both in terms of public notoriety and market capitalization. People don’t even consider the difference between the two and consider them only as of the cryptocurrencies. But if you dive into the details of both these cryptocurrencies, you’ll understand that these cryptos are built to serve different purposes. You can choose to buy Bitcoin and Ethereum from crypto exchanges like cryptotrader.software that not only allows purchase but also storage of cryptocurrencies.
Learning about these cryptos will also provide you knowledge about Ethereum as both the cryptocurrencies are based on blockchain technology. Before you invest in any of these cryptocurrencies, gain complete knowledge about them and stay updated about the current market status.
Let us first learn about the main differences between Bitcoin and Ethereum that are not commonly known to beginners.
- Bitcoin is a cryptocurrency, whereas Ethereum isn’t particularly a currency but a platform.
- The transactions carried out bitcoin network is monetary, whereas transactions of Ethereum are executable code.
- Bitcoin serves the main purposes of the medium of exchange and store of value, whereas Ethereum is none.
- Transactions are processed much faster on Ethereum as compared to Bitcoin.
- Ethereum was developed to overcome the flaws of Bitcoin and as a complement to Bitcoin by being based on blockchain technology, but both are competing instead.
Bitcoin is the face of cryptocurrencies for the past decade as it is the largest cryptocurrency in the crypto space. In the past decade, many cryptocurrencies were built, but no one has the potential to compete with Bitcoin, but now the competition is heating up between Bitcoin and Ethereum. If we look at the current status of this year, 2021, in January 2021, Bitcoin held around 68% of market capitalization, whereas Ethereum held only 10%. Today, in May 2021, Bitcoin held around 42% of market capitalization, whereas Ethereum held 19%, which is great growth.
What are the key differences that led to the growth of Bitcoin and Ethereum?
As mentioned earlier, there are multiple differences between Bitcoin and Ethereum. Let us discuss those differences in detail.
Currency vs. Platform
Bitcoin was developed as an alternative to fiat currencies. Therefore Bitcoin particularly focused on being a pure cryptocurrency and focused on being a store of value and medium of exchange. Talking about Ethereum, on the other hand, it is a platform that runs decentralized applications and smart contracts instead of being a cryptocurrency but has its currency known as Ether. Ethereum is a platform that is decentralized in nature and functions more like an app store.
Speed vs. Security
Bitcoin was developed first, and Ethereum followed its footsteps, but Ethereum’s developer focused on overcoming the flaws of Bitcoin. The speed of processing transactions of Ethereum is faster. The block time of Ethereum is around 14 seconds, whereas the block time of Ethereum is 10 minutes for processing the transactions. A bitcoin transaction takes around 40 minutes to show up, whereas Ether transactions take only 5 minutes to process and complete the transaction.
Why investors like Ethereum?
The case of Ethereum is different from Bitcoin as investors and traders love the Ethereum platform as it has the ability to adapt to the basic and changing needs of investors. Blockchain is the modern technology that everyone is adapting, and by investing in Ether, you are directly indulged in the blockchain platform and are betting on its future. Investors now look at Ethereum as an asset, or we can say growth-type investment, and, surely, its development with continue and its decentralized ecosystem will grow.
Currently, Ethereum is the only blockchain hosting NFTs, and a record was set when someone purchased an art piece worth $69 million. NFT allows users to trade different assets and lend and borrow money directly without involving any financial institutions. Bitcoin and Ethereum are incomparable, but both are valuable. Both Bitcoin and Ethereum are built to serve different purposes and have different uses. Before you invest in any of these, you must consider their merits and demerits.
The Bottom Line
Arguably, Ethereum always has a better side as it is a Decentralized Finance platform that isn’t limited but also includes huge risks.
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