Finance

What’s the Difference Between Ethereum and Bitcoin?

Blockchain technologies are continuing to get all the hype in the market thanks to the growing popularity. Almost everyone is talking about some form of cryptocurrency.  Many people are continuing to gain knowledge and accept both Ethereum and Bitcoin and their role in cryptocurrency. 

However, many are still ignorant of the difference between Ethereum and Bitcoin since they’re complicated in technology. There is a lot of confusion surrounding Bitcoin vs. Ethereum starting right from their definition. Are they all forms of investment or digital currencies?

Well, this article is here to set the record straight and point out the difference between Ethereum and Bitcoin. If you’re interested in cryptocurrency, take your time to understand how these two work.

Bitcoin Definition

Many people understand Bitcoin as a digital dollar. Well, that all it is about Bitcoin. It means that a digital platform holds your money.

It offers a way in which online currency is secured without a central authority. You can never find physical Bitcoins as they’re all held in digital forms.

Bitcoin becomes one of the most successful online currencies. It has become a predecessor to almost all cryptocurrencies.

Bitcoin continues to gain popularity. It has risen when the concept of a virtual, decentralized currency is gaining acceptance in the eyes of regulators and various government bodies. 

Well, it’s still struggling to become a medium of payment. But it has managed to coexist with other financial systems amidst debate and scrutiny.

People buy Bitcoin because they want a different way to store their money other than the traditional banks. Others consider Bitcoin as a way of investment. They believe that the value will go high after a few months or years, and they’ll gain.

Others buy Bitcoin as a way of investing in companies that raise money through ICO. This means these companies do not allow equity purchase through traditional currency. These companies only allow you to buy tokens through Bitcoin and Ethereum.

Ethereum Definition

Ethereum is another form of cryptocurrency which has grown to become the second-largest after Bitcoin. Experts predict that it might grow to overtake Bitcoin in the coin market. Through Ethereum, blockchain technology has created applications that go above, enabling the digital currency. 

Ethereum is a well-established and open-ended decentralized software platform. This means Ethereum is not just another cryptocurrency because it differs in technology. It comes with its programming language running on a blockchain. 

Ethereum coins are valued as Ether and people can also buy and sell them. Investors use Ethereum to buy ICO opportunities. Ether is also used in the Ethereum network for running various applications.

People use Ether in different parts of the world to make purchases, as collateral, or as a store of value.

Difference Between Ethereum and Bitcoin in Technology

Technology is the main difference that makes people go for Ethereum or Bitcoin. Bitcoin is a form of digital currency. Ethereum, on the other hand, is a ledger technology that companies employ in building new programs. 

Both operate under blockchain technology through Ethereum appears to be more robust. Bitcoin is version 1.0 in its block limit. This means the number of transactions in a single block cannot exceed 1MB. 

Ethereum will be version 2.0 to allow the building of decentralized applications on top of it. It doesn’t have a block limit. Miners decide its number of transactions. It can accommodate up to 15 transactions per second.

They Have Different Aims and Roles

In a nutshell, both Ethereum and Bitcoin have separate roles and aim at different goals. Bitcoin came as an alternative to the national currency. It aims to become a medium of exchange or a store value. Ethereum intends to become a platform that facilitates programmatic contracts, immutable, and various applications through currency.

Both Ether and BTC are used as digital currencies. However, Ether did not establish itself as a monetary system alternative. It was instead meant to facilitate and monetize smart contracts and decentralized application platform. Ethereum facilitates peer-to-peer applications and contracts through its currency vehicle.

Ethereum Is Faster Than Bitcoin

Ethereum is faster than Bitcoin. Ether transactions settle in seconds and not minutes, as in the case with Bitcoin. Bitcoin takes up to 10 minutes in its average block time, while Ethereum takes only 12 seconds to complete a transaction.

While it’s still blockchain-based, Ethereum operates as a store value. Many people see it as a platform for distributed computing. This is mainly because it comes with its built-in currency, commonly known as Ether.

Ethereum Is More Sophisticated

Experts picture Bitcoin as a database of accounts with some currency stored in them. Ethereum comes in a more sophisticated construction. 

They’re capable of storing computer code and applications. They’re capable of using the CPU power that goes into the network to execute.

Businesses, individuals, and governments will buy and sell Ethereum. This will be to tap into the network’s distributed resources and be able to run their apps. 

Ethereum network enables the creation of other cryptocurrencies through the same Ether protocol but on different blockchains. They can be private or public.

Should You Go for Bitcoin or Ethereum?

Both Bitcoin and Ethereum are expected to grow over the coming years. Bitcoin currency is continuing to become widely accepted for purchase and investment all over the world. Ethereum network is increasingly getting established as a standard for distributed computing.

Take your time to understand the difference between Ethereum and Bitcoin before thinking of where to invest. Also, think of different aspects such as government regulations, the technology involved, and all the finer details before making any decision.

If you need more insights on financial matters, including Bitcoin and Ethereum investment, you’re welcome to seek more information from this site. There are a lot of helpful guides and informative content here, ready to help you out.