Bitcoin is the most popular Cryptocurrency, with the largest market cap in the Cryptocurrency market, and Ethereum is the second largest in terms of popularity and market cap as well. You can trade both Bitcoin and Ethereum on websites like Bitcoin Code. However, if you are confused regarding which one would be more appropriate to invest in, here is a comparison between the two to help you understand them better when investing.
Bitcoin: An Overview
Launched in January 2009, Bitcoin brought a fundamental idea set out in a white paper by Satoshi Nakamoto. Bitcoin promises a form of secure currency but without the involvement of any central intermediary authority like the banks and the Government. Bitcoins are not physical coins. They are just balances stored on a public ledger called Blockchain cryptographically.
A common misconception is that Bitcoin was the first attempt at this form of currency. It was not the first, but it was the one that showed the most successful in its early stages. It is considered the predecessor to all of the Cryptocurrencies developed after it. Cryptocurrency has carved a place for itself and coexisted with the financial system, all thanks to Bitcoin.
Ethereum: An Overview
The utilization of Blockchain technology that Ethereum introduced has created applications that go way beyond just a digital currency. Ethereum was launched in 2015, and it has grown to become the most prominent software platform that is open-ended and decentralized. Smart Contracts and Decentralized Applications (dApps) are utilized without any control or interference from a third party, downtime, or fraud. Since Ethereum’s code is open to all and runs on a Blockchain, other programmers take inspiration from Ethereum’s code to create dApps.
Difference Between Ethereum and Bitcoin
There are certain similarities between Ethereum and Bitcoin, as both of them run on a consensus protocol that is referred to as ‘proof of work’. However, Ethereum will be moving to a new protocol called ‘proof of stake’, which will make Ethereum more sustainable, secure, and scalable. Block time, which means the time to confirm a transaction is in minutes for Bitcoin, whereas Ethereum has it in seconds.
Bitcoin was initially created to replace national currencies. Ethereum was developed as a platform where its currency is immutable, programmatic, and automated contracts and applications could be facilitated. BTC is designed to replace whereas ETH is developed to monetize and facilitate the Smart Contracts and the dApp platforms.
Bitcoin, unlike Ethereum, has a limited supply. Its supply is capped at 21,000,000 coins, whereas Ethereum has an unlimited supply. However, it has been noticed in the recent updates that the block space required to create new coins has grown.
The Bottom Line
Finally, Bitcoin has a market cap of about 48% of the Cryptocurrency market, valued at $1.08 trillion. Ethereum, on the other hand, has a market cap of $2.25 trillion, valuing it at 23.4% of the Cryptocurrency market.
This was everything you needed to know to understand Bitcoin, Ethereum, and the differences between the two.
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