Launched in 2009, Bitcoin was the first crypto currency to come into existence. Since then, we have seen many cryptocurrencies that run on the same technology i.e., blockchain. However, they all have their unique selling points.
Due to the excess supply of multiple crypto currencies, confusion may arise in the minds of people. In fact, a lot of investors are usually unaware of the differences in the cryptocurrencies they are dealing with.
Through this post, we try to resolve the problem by explaining the difference between two of the largest cryptocurrencies in terms of market cap – Bitcoin and Ethereum. We aim to cover various aspects of both cryptocurrencies and take a look at the points that differentiate them. So, without any further ado let us jump straight into it.
What are Bitcoin and Ethereum?
In 2009, an unknown person, launched Bitcoin. Yes, he still remains unknown! The only thing people know is their pseudonym – Satoshi Nakamoto. Bitcoin was launched with a limited supply of 21 million coins out of which more than 18.7 million have been mined already.
In the last 10 years, there has been immense development in Bitcoin in terms of various aspects. In fact, it has become so popular that it is now used for various types of payments as legal tender in countries like El Salvador.
Ethereum is the second-largest currency after Bitcoin in terms of market cap. It was in 2015 when Vitalik Buterin launched Ethereum. Not to forget, he was only 21 years old back then.
Just like Bitcoin, Ethereum runs on blockchain technology. However, the software that powers Ethereum makes it blazingly fast. Other than that, it allows Ethereum to act as a ‘smart platform’. Therefore, developers can use Ethereum for creating apps or even other cryptocurrencies.
Similarities between Bitcoin and Ethereum
As both Bitcoin and Ether are cryptocurrencies, there are a lot of factors that are common. Let us take a look at them
- Decentralization: Decentralization is the basis of any cryptocurrency. It implies that there is no central authority that can manage, regulate, and control a particular currency.
Fiat currencies are generally managed by central authorities. For instance, RBI in India is responsible for producing and issuing currency notes. The currency notes are the legal tender in India.
However, no central authority has control over bitcoin and Ethereum. In fact, what happens is quite the opposite. We will be discussing this in the next point.
- Blockchain: Blockchain is the technology that powers and supports cryptocurrencies like Bitcoin and Ether. As the name suggests blockchain is a chain made up of blocks that contain the information of multiple transactions. In simple words, blockchain is a decentralized ledger.
Therefore, all the members of the network have access to all the transactions that have taken place. This also helps in ensuring that there is no duplication of transactions.
Differences between Bitcoin and Ethereum
- Roles: A lot of people are unaware of the fact that even though both are cryptocurrencies, Bitcoin and Ether serve different purposes. In the year 2009, bitcoin was not launched with the intention of making it a cryptocurrency. Satoshi designed bitcoin to make the transactions anonymous and remove third parties from the same
On the other hand, Ethereum is a platform that allows other developers to create cryptocurrencies and decentralized apps. Every user that uses Ethereum has to pay a certain fee in a defined currency ‘Ether’. Therefore, Ethereum is not a coin but a platform or network.
- Acceptability and availability: Bitcoin was launched more than a decade ago while Ethereum was launched a few years after it. Due to this, it could not receive the popularity Bitcoin did or does. At times we have witnessed the surge in prices of Bitcoin after tweets from renowned people. However, that is not the case with Ethereum.
In terms of availability, Bitcoin is limited in number while there is no limit on Ether as of now. If we talk numbers, there are 21 million Bitcoins out of which 18.7 are already in circulation. Whereas, there is 116 million Ether in circulation.
Online course on cryptocurrency
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