Ethereum or Bitcoin? The debate rages on, but in essence, the two are quite different and can even complement each other for certain use cases. Read on to know more.
If you’ve ever been interested in cryptocurrencies, chances are you have heard of two giants in the space — Bitcoin and Ether (bitcoin is the token on Bitcoin network and Ether is the token on Ethereum network). Although both of them are cryptocurrencies, they have many features which set them apart. Let’s explore the two in this article — what they are and how they are used, their similarities and their differences.
A Brief about Digital Currencies
Digital currencies or virtual currencies exist in the electronic form and can be accessed through a mobile or a laptop/computer. Cryptocurrency networks are decentralised, which means they are not regulated or issued by a central authority like a government or a central bank. Instead, they are validated by a network of computers.
Among the digital currencies used around the world, ether is the second most popular token, right after bitcoin. Comparisons between the two have made rounds since Ethereum network was first released in 2015. Just like many digital currencies, both ether and bitcoin leverage blockchain technology and are stored in cryptocurrency wallets.
But choosing between the two for your next asset investment might be difficult, especially if you are new to the world of cryptocurrency. If you are in a fix regarding the choice of your digital currency, Unocoin is here to assist you.
Unocoin is India’s most extensive Crypto Assets Trading and Blockchain Company. It is the most trusted place in India for trading Bitcoin, Ether, and Tether. They can provide you with all kinds of assistance to buy and sell various cryptocurrencies. Additionally, they have a dedicated mobile application that is available on Android and iOS platforms.
Comparison between the two top cryptocurrencies
Let us start off by talking about each of the digital currencies in detail. Enter the king and the first of cryptocurrencies, Bitcoin.
What is Bitcoin (BTC)?
Released in 2009 by a single person or a group of people under the pseudonym of Satoshi Nakamoto, Bitcoin is a cryptocurrency that is designed to be traded worldwide. It is a digital currency that is decentralized, unlike government-issued currencies. The technology that powers bitcoin transactions is called cryptography — and as the name suggests, it helps secure all bitcoin payments. One of the critical points as to why many people prefer it is that it keeps the sender’s and receiver’s identity pseudonymous.
What are the features of Bitcoin?
In addition to the benefits of safety and security owing to the use of cryptography, the transaction fee for any transaction done using Bitcoin is relatively low.
Even though Bitcoin is not one of the first digital currencies to have existed, it was indeed the one that envisioned some success in its early days.
Bitcoin, since the outset, has been ambitious and truly democratic in its reach, and it thus paved the way for all the cryptocurrencies that followed. Being decentralized, it is not yet recognized as a formal medium of payment. However, cryptocurrency has still found a way to coexist with the existing financial system even after the continuous scrutiny and debate.
Now, let us talk about Ethereum.
What is Ethereum (ETH)?
Developed in 2015 by Vitalik Buterin, it is smart blockchain, of which the tokens are called ether. These ether tokens are also equivalent to bitcoins in the Bitcoin network but its primary purpose is to pay for executing code on ethereum blockchain. Ether is used whenever there is a need to build and deploy decentralized applications.
What are the features of Ethereum?
You can use ether to pay for services such as buying computational power that is needed before adding a block to a blockchain and paying the transaction fees. Ether works in similar ways to Bitcoin and hence can be used for peer-to-peer payments as well. Ethereum also sets up smart contracts — these are condition-dependent contracts, which means that individual output is observed once a specific set of predefined rules is satisfied.
When smart contracts and decentralized applications are deployed on Ethereum, they can be run without fraud, downtime, control, or even disturbance from a third party.
Additionally, it comes with its own programming language, which runs on a blockchain, thus making it easier for developers to build and run distributed applications.
Finally, let us discuss the significant differences between the two cryptocurrencies, even though distributed ledgers and cryptography principles power them both.
Key Differences between Ethereum and Bitcoin
Bitcoin was formed as a radical move to generate a form of digital money that is not regulated nor controlled by any government or organization. Ethereum, on the other hand, was formed as a platform to help secure the decentralized financial contracts and applications by using blockchain technology.
Recently, the debate on Ethereum vs Bitcoin has gained tremendous attention. Bitcoin is now a well-established and the most popular cryptocurrency in the world. Not just that, it also has the largest market cap when compared to any other cryptocurrency. In other words, it is at the top of the cryptocurrency world.
Ether was not as successful as Bitcoin was in its early days, and neither was it as widely accepted. Still, its creator learned from the mistakes and shortcomings in Bitcoin and tried to overcome those by providing its users with more functionalities. It is fair to say that it is the second-largest and the second most popular cryptocurrency in the market.
So, after reading all this information about Bitcoin, Etherum, and the differences between the two, you now have enough talking points to be a part of Ethereum vs Bitcoin debate!
- Which is better: Bitcoin or Ethereum?
In case you only want to perform peer-to-peer transactions, then Bitcoin will be the perfect fit for you. But if you are looking to build and run decentralized applications or smart contracts, Ethereum is the right choice instead. So deciding which is better depends on your requirements and needs.
- Will Ethereum surpass Bitcoin?
In recent times, we have witnessed governments starting to put restrictions on cryptocurrencies. Ether is nothing but just gas to run on the Ethereum network. These restrictions may affect ether, but the Ethereum network will remain u
nscathed, and banks and businesses will still perform payment services. However, we also need to remember that the combined market capitalization of both these cryptocurrencies is considerably less than some big companies’ market capitalization. This means that both the cryptocurrencies can coexist in peace, and as of now, Ethereum will not surpass Bitcoin.
- Why is Bitcoin more expensive than Ethereum?
There are three main reasons why Bitcoin is more expensive than Ethereum:
- Its utility and store of value factor give Bitcoin an edge over Ethereum. Even though a bitcoin and an ether token do the same task for a specific individual or business, bitcoin is better due to its application.
- Bitcoin sometimes have a feedback loop of investors who keep reeling back in to produce more profits. The price of Ethereum is more or less affected by the rise or fall in the costs of the Bitcoin. This makes Bitcoin a better buy for investors and businesses the same.
- Last but not least, it can be said that the price advantage of Bitcoin comes from the fact that it is more popular than Ethereum since it has more public awareness. If anyone ever thinks of getting into the cryptocurrency marketplace, it almost immediately implies that they will invest in Bitcoin.