Ethereum vs Bitcoin: Differences You Shall Know

Over the past few years, the open confrontation between Bitcoin and Ethereum has been noticeable in the cryptocurrency market. The first cryptocurrency is still the leader in terms of capitalization. However, the altcoin is also actively growing, attracting more and more new users. 

Before explaining the differences between these cryptocurrencies and buying them on https://letsexchange.io, let’s look at the key features of the two leading cryptocurrencies.

Bitcoin Characteristics

Bitcoin is the first and most famous cryptocurrency. Millions of transactions have been carried out with it. It runs on a blockchain. Blockchain is new-generation information technology. It is the ledger where all transactions are recorded. All new transactions are added to the blockchain every 10 minutes and recorded in the ledger. Transactions made in this cryptocurrency can’t be deleted or changed.

It is not connected to the main center. No organization can control it and its production. It is an anonymous and transparent process. Bitcoin can only be considered a payment unit. Its blockchain is not designed to create applications and doesn’t allow complex interactions to be programmed. 

Ethereum Characteristics

Ethereum is the protocol itself, and the currency it works with is called Ether (or ETH). It appeared in 2015. Although it is based on the same blockchain technology, it immediately became the second competitor in cryptocurrency investments. However, its developers decided to use blockchain technology not only as a currency. It provides special smart contracts that can be used to create decentralized applications.

Smart contracts are analogous to legal contracts in the digital world. They use blockchain technology to automate transactions. These contracts enable dApps, which are similar to smartphone apps that run on Android or iOS operating systems, except that they are not under the control of a single company or authority.

Ethereum is attractive to many large organizations. The platform is considered interesting by such giants as JPMorgan Chase & Co and Microsoft. Some experts compare investing in this cryptocurrency to investing in a technology company.

What Are Their Differences? 

These are the two cryptocurrencies at the top of the rankings. For most ordinary people, they are almost no different, just competitors. For those who understand, these are completely different technologies:

• Both cryptocurrencies have their advantages. Moreover, you can exchange ETC to BTC whenever you want. The biggest difference between them can be called the ultimate goal of these projects. Bitcoin aims to become a globally accepted currency. The goal of Ethereum is to become a platform where smart contracts and decentralized applications can run.
• Bitcoin is a peer-to-peer payment system, while Ethereum is a digital currency and platform. 
• Ether has an unlimited supply. In turn, BTC has a limit of 21 million coins. Altcoin, just like Bitcoin, can be mined through mining. Miners use a Proof-of-Work consensus algorithm in both cases. However, Ethereum plans to switch to Proof-of-Stake (PoS).
• BTC is a payment network that can be used to transfer transactions between users anywhere in the world. Today, BTC is mainly used for investing. In turn, Ethereum seeks to create an infrastructure that any organization doesn’t support.
• Both cryptocurrencies work on separate protocols. Their processes are not connected to each other. This means that some transactions allowed on one platform may be prohibited on another. Thus, transactions on the Ethereum network can contain executable code. Data related to transactions on the Bitcoin blockchain is used only for record-keeping.

In 2022, they will remain the main cryptocurrencies in the market. Despite their high volatility, investor interest is not waning. Large corporations and financial institutions are taking advantage of digital currencies. Government adoption continues to grow.