Cryptocurrencies have stopped being a niche topic a long time ago, but they still refer primarily to Bitcoin for many people. It’s true that Bitcoin is the unquestionable king of the whole digital currencies world, but it doesn’t mean that other players aren’t worth your attention; on the contrary.
Apart from Bitcoin, Ethereum is one of the biggest names among cryptocurrencies. It’s actually the second-largest by market capitalization, which may be surprising when you learn that it was first launched in 2015. There are those claiming that it may be much better to put your interest into Ethereum than Bitcoin.
To be able even to start forming an opinion on the matter, you need to know the differences between Bitcoin and Ethereum. And we are here to help.
What Are Bitcoin and Ethereum?
For many people, this is the choice between two things that serve basically the same purpose, but it’s not entirely true. It’s more about staying within the same niche but focusing on two different sets of tasks. Ethereum was actually created as a completion to Bitcoin but ended up being a sort of competition but with a different goal.
Bitcoin
Bitcoin was created in 2008 and first released a year later by its maker, a mysterious figure going by the name Satoshi Nakamoto. There were some attempts before, but Bitcoin was the first digital currency with no actual physical form, which is why all the later cryptocurrencies, including ether, usually get their value in relation to Bitcoin.
Its purpose was to become a viable, independent alternative to all fiat currencies dependent on governments and create a decentralized system for managing money.
Bitcoin is also more widely accepted as a payment method; they are even services based solely on this currency, such as bitcoin casinos and slots (e.g., www.mybitcoinslots.com or Bitcasino).
Ethereum
Ethereum was first launched in 2015 as an update to some Bitcoin bugs and lacks, but developers saw its programming potential, so it soon became a separate platform.
Actually, the cryptocurrency is called ether, and Ethereum itself is much more than that – a decentralized platform on which ethers functions. It is also a programming language used for building apps on the platform; managing ethers is what powers it all.
Bitcoin vs. Ethereum
Similarities
Both Bitcoin and Ethereum are decentralized and 100% independent from any authority; they serve as alternatives to money transactions that generally need to go through banks.
Both are built on blockchain technology and, therefore, are equally almost hack-proof.
Most of the respectable, trustworthy trading platforms allow you to trade both bitcoins and ethers.
Differences
They are as different as they can be considering they are based on the same idea and technology.
Bitcoin was built as an alternative to fiat currencies, and it remains to be its primary purpose. Storing value and mining are still the main things offered by Bitcoin, and it’s unbeatable when it comes to the quality of these services.
Ethereum, on the other hand, can be used to manage ethers and is even relatively effective when it comes to storing value, but you could call it its side job, the main still being monetizing smart contracts and Ethereum-build apps.
The market cap of Bitcoin at the beginning of 2020 was around $150 billion, while that of Ethereum – $16 billion. However, the difference in the number of people holding the chosen cryptocurrency in their digital wallets is not as significant. In fact, it is almost non-existent.
What’s curious, there are many people who prefer bitcoin as a currency but Ethereum as a platform and, therefore, store their bitcoins on Ethereum, but it doesn’t work the other way around.
Bitcoin is accepted as payment by more and more companies in the world, and right now, it doesn’t look like ether could achieve this. Bitcoin is simply more popular; the currency is more valuable, which makes it easy to buy, sell, and trade it, so it’s not surprising that many newcomers decide to use it. However, Ethereum is recognized as a faster platform, making it the preferred way to transfer money (it holds more daily transactions than Bitcoin). Also, the fees are lower with Ethereum.
Conclusion
Bitcoin is the most proven and most popular cryptocurrency in the world. It is also the most widely accepted as a payment method. However, Ethereum has higher speed and transaction fees, as it’s simply better built.
To sum up, though, there is no straightforward answer to a question which cryptocurrency is better because this depends on why and how you want to use it. Then, there are countless other possibilities besides Bitcoin and Ethereum that you shouldn’t dismiss without checking. So, if you want to jump into the world of digital currencies, it’s crucial to do some thorough research first to make sure you choose the most suitable option for you.