Bitcoin was first traded in 2009. You could purchase one of the latest digital tokens for less than $0.01 back then. Prices grew slowly to a high of $20,000 per coin at the end of 2017. Ethereum launched at $2.83 in 2015, and over $1,400 in less than three years.
Although they are the two main cryptocurrencies by market capitalization, comparisons more or less end there. Bitcoin and Ethereum are entirely different species, created for different purposes and with different internal dynamics.
Let’s take a closer look
Bitcoin vs Ethereum: Functionality Difference
De facto king of the blockchain, no other coin is very similar to Bitcoin or BTC. At the time this article was published, the dollar amount of all Bitcoin remaining was $150 billion. The estimated market capitalization for all cryptocurrencies is $230 billion, and the second most popular digital currency was Ethereum, with a market valuation of less than $18 billion.
Here are some key points that investors should note about BTC in the Bitcoin and Ethereum investment debate:
The reward is dropping from 12.5 BTC per block to 6.25 BTC, which would delay the expansion of supply. There are a limit of 21 million bitcoins that will ever exist; about 18.2 million are currently in existence.
Best interest from the major investors.
Relative stability, simplicity and acceptability.
Decentralized currency, beyond the reach of the Federal Reserve or any other central bank and with a predefined maximum availability, is an idea that people around the world will identify with. This what Yang refers to as the “simplistic essence” of the crypt, has real-world consequences for the digital asset itself.
Ethereum: a target distinct from that of Bitcoin.
The two leading cryptocurrencies have “completely different use cases, with Bitcoin serving as a value store and Ethereum acting as a new decentralized technology development computing network,” says Zac Prince, founder and CEO of BlockFi, a crypto lender and wealth management firm backed by investors including Peter Thiel and Winklevoss Twins.
Yang agrees with that. “I think they’re so different that it’s like deciding between two stocks from different markets,” she says.
The opportunity to use the Ethereum blockchain to alter the way mortgage exchanges, stock exchange and many other fields operate naturally has given rise to the next functionality.
More production, please.
Of necessity, since the utility of Ethereum is constrained only by the creativity of the creators of the planet, there is further development across the network. Technically, the cryptocurrency used to allow ethereum transfers is called “ether,” but it is commonly referred to as ethereum.
Any way, the number of Github ethereum-related repositories is 223 to four in Bitcoin. Repositories are equivalent to project directories where Github-based developers can view project details.
A radical change in the way blocks are formed.
Instead of miners with the most computing capacity having the greater advantage in the efficient production of new tokens, those with the highest shareholdings would be given the right. Any people assume that this could pose threats.
Although both the Bitcoin and Ethereum networks are powered by the concept of distributed ledgers and cryptography, the two are functionally different in many ways. For example, transactions on the Ethereum network which contain executable code, while data affixed to Bitcoin network transactions are usually for note taking purposes only. Other discrepancies include block time (ether transaction is validated in seconds relative to minutes for bitcoin) and algorithms that run on (ethereum uses ethash while bitcoin uses SHA-256).
More specifically, though the Bitcoin and Ethereum networks are different from their general goals. Although Bitcoin was developed as an alternative to national currencies and hence aspires to be a medium of trade and a store of value, Ethereum was intended as a forum for promoting irreversible, programmatic contracts and applications via its own currency.
BTC and ETH are also digital currencies, but the primary goal of ether is not to create itself as an alternate monetary structure, but rather to promote and monetize the activity of the Ethereum smart contract and the decentralized application (dapp) framework.
Ethereum is another use-case for a blockchain that supports the Bitcoin network, which does technically not even conflict with Bitcoin. However, Ether’s success has driven it into competition with all cryptocurrencies, notably from the point of view of traders. For much of its existence since its debut in mid-2015, ether has been near to bitcoin in the highest market cap cryptocurrencies lists. That said it’s important to bear in mind that the ether economy is much smaller than bitcoin’s: as of January 2020, the ether market cap was just under $16 billion, while bitcoin’s is almost 10 times that of more than $147 billion.