In the world of avid cryptocurrency fans, two words stand out: Bitcoin and Ethereum. They are the most sought-after and traded digital assets since inception. In fact, even non-crypto enthusiasts know these terms. Some people even say Bitcoin when they really mean is cryptocurrency.
Both Bitcoin and Ethereum have significantly impacted the world of finance and technology.
Bitcoin has become a store of value, with some investors considering it a digital version of gold. On the other hand, Ethereum has become the foundation of the decentralised finance (DeFi) movement, which enables users to borrow, lend, and trade cryptocurrencies without needing a centralised authority. So while these two are different in minor ways, they essentially fulfil a similar purpose.
But which one is the true King of Cryptocurrency?
Is it Bitcoin, with its massive market capitalisation and first-mover advantage? Or is it Ethereum, with its versatile platform and ability to support a wide range of decentralised applications?
In this blog post, we'll explore the differences and similarities between Bitcoin and Ethereum, examining their respective strengths and weaknesses. By the end of this article, you’ll have the facts to put this debate to an end.
What is Bitcoin?
Bitcoin is a decentralised digital currency, meaning no government or financial institution directly controls it. Instead, it is a peer-to-peer (P2P) electronic cash system with transactions conducted amongst users. Created in 2009 by an anonymous individual (or group) known as Satoshi Nakamoto, one of its essential features is that it keeps the identity of the people sending and receiving money anonymous.
An example of the groundbreaking breakthrough of Bitcoin lies in its comparison with the use of traditional banks. With the traditional banking system, hassles such as the exorbitant fees or the long, or even sometimes unsuccessful, transfer times, Bitcoin swooped in like a knight-in-shining armour.
Bitcoin is the first cryptocurrency based on decentralised ledger technology (DLT) called the blockchain. Blockchain technology solved several problems, including the Byzantine General’s Problem (a game theory problem describing the difficulty of arriving at a consensus in a decentralised situation without relying on a trusted central party). So, similar to blockchain, it employed the use of Proof-of-Work.
Over the years, Bitcoin has gained popularity. While not fully a legally recognised medium of payment or store of value, cryptocurrency has managed to carve a niche for itself. It continues to co-exist with the financial system despite being regularly scrutinised and debated among lawmakers worldwide.
Overall, Bitcoin represents a new way of thinking about money.
What is Ethereum?
Here’s what most people don’t know: Ethereum isn’t only a digital cryptocurrency like Bitcoin.
Ethereum is also a platform for building. As a decentralised and open-source blockchain platform, this technology can be used to create decentralised applications (dApps) and smart contracts. Launched in July 2015 by Vitalik Buterin, Ethereum is the largest and most well-established decentralised software platform.
Launched as one of the most ambitious projects in the crypto space, its back-end code is placed in a distributed peer-to-peer network instead of a centralised server. Ether is also used to pay for services, like the computational power required before a block can be added to the blockchain and transaction fees.
The native cryptocurrency of the Ethereum blockchain is called Ether (ETH), which is used to pay transaction fees and computational services on the network. Like other cryptocurrencies, the value of ETH can be highly volatile and is subject to market demand.
Perhaps most importantly, Ethereum enables the use of Smart Contracts, the most significant innovation that makes it stand out. Smart Contracts work in such a way that when a specific set of pre-defined rules are satisfied, a pre-determined output happens.
Overall, Ethereum represents a new paradigm in computing and has the potential to revolutionize many industries, from finance to real estate to healthcare.
What are the differences between Bitcoin and Ethereum?
So, Bitcoin Vs Ethereum: Who Is The King Of Cryptocurrency?
Well, it depends on your requirements.
While Bitcoin works better as a peer-to-peer transaction system, Ethereum works well when creating and building distributed applications and smart contracts.
Ultimately, the debate between Bitcoin and Ethereum as investments comes down to your risk profile as an investor. Both have the potential to perform well over time as the world continues its shift to the digital.
In short, the King is whoever you crown.
But to get started on either (or both) of these kings, click here to get start trading.