Bitcoin is the largest cryptocurrency, whereas Ethereum is the second-largest cryptocurrency in the financial market. Ethereum is the second-largest cryptocurrency in terms of market capitalization as bitcoin has the highest market cap. Both bitcoin and Ether have many similarities and only a few points of differences between each other. Bitcoin and Ethereum are the digital currencies built on blockchain technology and are decentralized in nature, which means these are mined and not issued by the government.
With so many similarities in between, bitcoin and Ethereum both are the largest cryptocurrencies. There are some prominent differences between popular cryptocurrencies, and the major one is market capitalization. Bitcoin and Ethereum are best for trading, and to trade them and improve your skills, keep reading to learn more.
Let us first learn the basics of both Bitcoin and Ethereum and then learn about differences.
Basics of Ethereum
Ethereum cryptocurrency is entirely built on blockchain technology. It was developed in 2015 and was introduced as the decentralized platform and become the second-largest cryptocurrency after bitcoin. We have been introduced with a unique feature with bitcoin that is smart contracts and dapps. The dapps refer to decentralized applications built, especially without any control or fraud from third parties.
It is a cryptocurrency built using a programming language that runs on a blockchain ledger and allows developed to create more distributed applications. Mainly, there are two purposes of Ethereum that include trading Ethereum as a cryptocurrency on crypto exchanges and are used to run applications on the Ethereum network. Ethereum is a store of value and can be used to make payments.
Basics of Bitcoin
Bitcoin was the very first digital currency that was introduced in 2009. It was the idea of a mysterious person or group of persons called as Satoshi Nakamoto to develop a free currency from the involvement of central authorities. Bitcoin acts as a medium of exchange and as a store of value. It is known as the largest cryptocurrency that has surpassed all the other cryptocurrencies in the market cap.
Even Ethereum is built following the steps of Bitcoin because bitcoin was the first cryptocurrency to be developed with decentralized nature. Bitcoin has managed to make its place in the mainstream, and as of now, many retailers have started accepting bitcoin payments. Bitcoin’s popularity has been possible because of enhanced user adoption of bitcoin currency.
Differences between Bitcoin and Ethereum
Both the cryptocurrencies Bitcoin and Ethereum are the largest cryptocurrencies based on cryptography and blockchain technology, but both the cryptocurrencies are different in their technical terms. For instance, Ethereum transactions contain an executable code, whereas the bitcoin transactions are only kept in notes. Another most prominent difference between Bitcoin and Ethereum is the speed of processing transactions. The block time is the time that is required to solve the transactions. In bitcoin’s case, the transactions take several minutes, whereas the Ethereum transactions are verified in seconds.
Both Bitcoin and Ethereum have different motives as bitcoin was developed to be an alternative to fiat currencies and act like a store of value and a payment method. Ethereum was developed as a platform to provide smart contracts that are programmatic and unassailable. The main purpose of Ethereum is not to be an alternative to fiat currencies but instead was to provide the option of smart contracts and dapps.
The entire ecosystem of bitcoin is much bigger than Ethereum because Ethereum was developed in 2015, whereas bitcoin was in existence since 2009. Also, the market cap of both cryptocurrencies differentiates between them. The market cap of Ether is around $16 billion, whereas the market cap of bitcoin is ten times more than that of Ether, making it the largest cryptocurrency.
The Final Word
Both Bitcoin and Ethereum are developed with different motives, but the main aim of all cryptocurrencies is to change the method of making payments. Each cryptocurrency is decentralized in nature. The reason cryptocurrencies are developed is to provide people with new methods of transferring money that can help them eliminate the middlemen and grow in this digital era. People have been benefitted from both Bitcoin and Ethereum, and trading and invest in both cryptocurrencies is advantageous as these are the largest growing cryptocurrencies.