Bitcoin vs. Ethereum. You might say – the clash of two titans. However, these are two such different crypto examples. They may be compared only because they became the two most popular cryptocurrencies. However, each has its own developer, background, development way, architecture, and more features.
In this article, we’d like to explain the basics of both Bitcoin and Ethereum and make a comparison that will dot the i’s.
Bitcoin cryptocurrency was created in 2009 when a person (or a group of people) named Satoshi Nakamoto released the white paper of Bitcoin. The cryptocurrency is based on peer-to-peer technology. The main feature of the coin is total decentralization.
Bitcoin cryptocurrency works without any intermediaries. It means that no bank or any controller participates in the transaction process. Therefore, no one can cancel, block or prohibit the transaction. Moreover, the fees are significantly lower than in fiat transactions.
Bitcoin is generated by the users’ computer power. So, we can say that the users create the cryptocurrency. This process of minting is called mining. It is based on solving complicated mathematical puzzles using the necessary equipment (ASIC miners). Bitcoin uses a Proof-of-Work mining algorithm. PoW increases security and validity. However, it has a negative effect. The equipment consumes a lot of energy, and it seems to be environmentally not friendly and expensive.
To make the process even more efficient, miners unite in pools to find the block as soon as possible. When the block is found, in other words, the puzzle is solved, miners get a 6.25 BTC reward. However, this reward is not constant and halves every four years.
The block is generated in about 10 minutes. There is a precisely scheduled Bitcoin emission, and the total amount of coins that will ever be issued is 21 million. The last emission should take place around 2140.
How can you use Bitcoins? First of all, users can make cheap transactions no matter how far and in what country they live. Some cafes, hotels, retail stores accept Bitcoins as a payment method. Moreover, such companies as Microsoft, Burger King, AT&T, KFC in Canada, Twitch, and even Porhub have this alternative payment method.
Obviously, Bitcoin is a great investment tool. Only for the past year, the price of BTC has changed dramatically: from $10,000 to $63,000. If you consider Bitcoin as a part of your portfolio, check out our cross-rates and buy Bitcoin within minutes on Changelly.
We have already discussed every piece of Bitcoin. Learn more.
Ethereum is an open-source platform that allows developers to create decentralized applications. This platform uses smart contracts, and Ethereum cryptocurrency acts as an internal currency to process them.
Unlike Bitcoin, Ethereum has a real creator – Vitalik Buterin. He is a Russian-Canadian programmer who was formerly known as an editor in chief of Bitcoin Magazine. However, Mr. Buterin became famous thanks to Ethereum.
Studying Bitcoin in 2013, Vitalik came to the conclusion that this blockchain does not have a scripting language that will later be reflected in Ethereum smart contracts. He invited the Bitcoin community to improve the technology, but no one supported him. So then Buterin created his own blockchain called Ethereum.
In 2013 Buterin wrote a white paper where he explained smart contracts. Finally, Buterin officially announced Ethereum at the North American Bitcoin Conference in Miami in January 2014. People accepted his ideas with admiration.
The blockchain works on the Proof-of-Work algorithm. It is used to make a reward for processing transactions and executing smart contracts. However, developers are shifting to the Proof-of-Stake, so there are no longer miners but validators. They are required to own an assigned amount of ETH coin (actually, 32), so they put their own Ether coins to certify that the block is valid. In case of malicious behavior, invalid validators lose their stakes.
The PoS reward method appears to be more energy sufficient. Also, it allows to focus on bandwidth rather than hashrate like in PoW.
The Ethereum Foundation, a non-profit organization, was created to manage the development of Ethereum. During the ICO, the project attracted $18.5 million. Ethereum has attracted many developers to go into the underlying technology and build their own apps on top of the blockchain.
Today, Ethereum is one of the best-developed ecosystems in the world. Sure it has its competitors on the market (Tron, EOS, Neo, etc.). However, no one could really overcome this giant. Ethereum is used as a payment for goods, services, and even NFT art pieces. Many investors suggest ETH coins to generate a high income. If you would like to consider Ethereum as your investment tool, feel free to take a look at our cross-rates. Just click the button below.
What is the difference between Bitcoin and Ethereum?
You may understand that the difference is HUGE. These are two technically opposite cryptocurrencies. Ethereum was not created to compete with Bitcoin. However, ETH’s popularity pushed it into the competition. We must admit – Bitcoin and Ethereum coexist and work towards different goals.
|Release date||January 3, 2009||July 30, 2015|
|Creator||Satoshi Nakamoto||Vitalik Buterin|
|The way put into circulation||By mining||ICO (raised $18.5 M)|
|Purpose||Acts as a peer-to-peer decentralized payment system||Acts as a decentralized platform that run smart contracts and apps without downtime, censorship, fraud, and 3rd party|
|Programming language||C++||Turing Complete language that includes 7 different programming languages|
|Total supply||21 million||Unlimited. The maximum annual supply is 18 million ETH|
|Mining algorithm||Proof-of-Work||Proof-of-Work, changing to Proof-of-Stake|
|Block time||10 minutes||14 seconds|
|Mining reward||6.25 BTC. Halves every 4 years||5 ETH (constant)|
Frequently Asked Questions
In this section, we’ve collected the answers to the most popular questions concerning the Ethereum cryptocurrency.
Is Ethereum better than Bitcoin?
No, it’s not. As well as Bitcoin is not better than Ethereum. Check the table above to sort it all out.
Does Ethereum go up like Bitcoin?
It definitely might! As you can see, someday Bitcoin was $2,000 as Ethereum now. So everything is possible.
What will Ethereum be worth in 10 years?
It’s such a long-term prediction that it seems to be impossible. Nevertheless, we are sure that Ethereum will improve and develop every year to reach new heights in 2030.