Bitcoin vs Ethereum: Exploring the Differences

While there are ~10,000 cryptocurrencies, only five dominate the crypto industry (in terms of market capitalization) with 75%. Two of which are Bitcoin and Ethereum. They have been number one (Bitcoin) and number two (Ethereum) in terms of their market caps for quite some time now.

With so many types of crypto on the market, it can be easy to feel lost. See this as an opportunity to diversify your portfolio. This is why doing your own research (DYOR), keeping up with the latest news, and investing strategies are well worth your time.

In this guide, we’re going to compare Bitcoin vs Ethereum. While we won’t ask you to choose favorites, you’ll quickly realize why these two top the charts. Keep reading to get the 411.

Bitcoin

Bitcoin is the grandaddy of cryptocurrency. Its infancy began in January 2009. An unknown figure (or group) known as Satoshi Nakamoto broadcast the idea with the whitepaper. It started with bitcoin as a decentralized peer-to-peer cash system.

These days, bitcoin is largely seen as a store of value similar to gold. Of course, you can use it as currency and practice self-sovereignty.

We are starting to see it get the recognition it deserves despite many naysayers and scrutinizers. Government bodies and regulators are starting to catch on to what all the bitcoin buzz is about.

Ethereum

Ethereum’s native token ether is more than just a cryptocurrency. Ethereum is a decentralized software platform. Its claim to fame is its smart contracts, dApps (decentralized apps), and DeFi (decentralized finance).

Traditionally, apps and their code are placed within a centralized server. The beauty of Ethereum is that it is decentralized, allowing anyone to build and deploy smart contracts without the need for a third party.

You can think of ether as the fuel that runs these smart contracts. Head to the link provided to know how to buy Ethereum.

This all came to fruition in 2015 thanks to Vitalik Buterin.

Bitcoin vs Ethereum

When comparing Bitcoin vs Ethereum, there are some key similarities and differences to note. They are both powered by blockchain (a distributed open ledger) technology and cryptography.

Ethereum’s transactions may have executable code, whereas Bitcoin’s transactions are meant for merely note-taking. Ether’s block time is much faster than Bitcoins too—taking seconds as opposed to minutes. Bitcoin’s algorithm is SHA-256 and Ethereum’s is Ethash.

One of the biggest similarities is the consensus protocol.

Bitcoin and Ethereum both use Proof-of-Work (PoW). With Proof-of-Work nodes agree on the information on the blockchain. Miners are rewarded for maintaining these transactions.

Soon, Ethereum will undergo “The Merge” to the Proof-of-Stake (PoS) consensus protocol with Ethereum 2.0. With this merge, we can continue to compare Bitcoin vs Ethereum and their protocols.

Comparing Crypto

As an investor, you’ll always be comparing crypto. Bitcoin vs Ethereum will forever be an ongoing debate due to their underlying technology. Money is forever changed thanks to these two behemoths.

The types of cryptocurrencies you decide to invest in will all be thanks to your research. The more you can understand the value that these cryptos have, the better off your portfolio will be. Get all your crypto intel right here on our blog.