Although people try to link them as cryptocurrencies, Bitcoin and Ethereum are really two different assets. One of their many uses and functions being the exchange of electronic assets and services as currency. Still, it’s important to know the similarities and differences between the two so you can decide which coin better meets your investment or transactional needs.
Both coins can be used to make payments – buy or store foreign currency as a valued reserve. One of the characteristics that stands out in both of these digital currency is that the assets move directly between the buyers, without having to go through an intermediary, financial entity, or any governmental organization.
Bitcoin was the first cryptocurrency and is considered the foundation for which many virtual currencies operate and base themselves on. Since its creation in 2009 by Satoshi Nakamoto, it has become the most famous, exchanged and valuable cryptocurrency as of this day.
In 2015 Ethereum made its first public appearance incorporating the basic premise of Bitcoin’s blockchain, but with a much faster transaction speed. Ethereum has the ability to process small pieces of code, called smart contracts. These contracts have made Ethereum the foundation of the ICO token market. See: US Government Tanks the Ethereum Market.
in addition, Either its own virtual person-to-person network, unlike dedicated servers or a mining platform like Bitcoin. For this reason, Either is much more controlled and centralized that Bitcoin.
The Bitcoin community has experienced a rollercoaster ride in recent months boasting very high highs and sudden drops, but Bitcoin still remains the most representative cryptocurrency in the global market, 56% at the time of writing. Bitcoin also has the backing of strong capable programmers, which few other cryptocurrencies can afford. This makes it a steady currency to invest in.
Ethereum is not a cryptocurrency at all, but a special type of blockchain technology that not only enables transfers of Ether between people, but can also be used to create other cryptocurrencies, which it does. A group of companies and universities has formed a non-profit organization to legitimize Ethereum. Promoting it as an open source platform and not as a commercial company, giving Ethereum massive credibility in the market.
One of the main differences between Bitcoin and Ethereum is found when dividing the whole part of the value of the coins into decimals. In the case of Bitcoin you get 8 decimals, but in Ethereum you reach 18 decimals. The smallest units of Bitcoin are milli bitcoin, micro bitcoin and satoshi, which is the smallest of all. In the case of Ethereum, the ether currency is divided into finney, szabo, shannon, babbage, lovelaces and wei.
Without going into too much technical details, Bitcoin uses the SHA-256d algorithm and Ethereum uses EtHash. These algorithms are those that encompass the security strength at cryptographic levels, which assure us by their complexity, high matching possibilities that guarantee their cryptic security.
The question that has to be answered is with which cryptocurrency you can make more money. For the moment it has been Bitcoin, with the number of nodes it has proves that the most profitable thing is to be a miner there, but this is changing and in the not so distant future Ethereum can take Bitcoin’s place as the king of virtual currency.
Excluding the high energy cost required to mine Bitcoin and the cost of the equipment, miners receive approximately 12.5 Bitcoins every 10 minutes which equals 91337.56 dollars. On the other hand in Ethereum 5 ethers are obtained every 14 seconds, that is 214.28 ethers every 10 minutes or 85347.724 dollars. Meaning that Bitcoin is right now the clear winner, but Bitcoin has been experiencing a fluctuation in recent months so this can change any day now.
You must also take into consideration that Bitcoin mining is similar to that of thousands of football players who compete to enter the NFL and only best of the best gets to play and gets paid. In the Ethereum NFL, the miners serve as the owner of the team, compensated for providing the infrastructure so that Ether players can invent new types of plays.
It is also important to take into consideration the volume of transactions, and for the time being Bitcoin is still winning, with 186, 217 confirmed Bitcoins transactions moved against 575,573 ethers in the last 24 hours. There is still much more movement in Ethereum because of the quickness of the transactions, but clearly the Bitcoin numbers are spectacular.
The Cryptocurrency market is still relatively new and there is still more to come. It is difficult to define which is better, but think of it as Bitcoin as the all star champion and Ethereum as the young rookie looking to take its place. All of the stats for these virtual coins change by the minute so it is important to take notice and make a smart decision when deciding how to invest your money.
I hope you’ve found this article on Bitcoin and Ethereum to be helpful. For more information on building a new cryptocurrency exchange, please contact us at firstname.lastname@example.org or call us at (619) 550-2743. We’ll be happy to assist you with core software, support, and a turn-key solution.