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Main differences between Bitcoin and Ethereum

Yuri | Published sun Nov 17, 2019 4:42 pm | 29 Views

Since its release in 2009, Bitcoin has been the leader in the cryptocurrency world. It is the first blockchain-based digital currency with an immutable distributed ledger of all transactions that are not controlled by any middlemen. It offers a dependable monetary transfer system free from political intervention and inflation.

Ethereum, first introduced in 2014, is often touted as Bitcoin’s strongest rival. But how do we compare the two? Ethereum’s founder Vitalik Buterin provided some insights: “Bitcoin was designed to be a Simple Mail Transfer Protocol. It’s a protocol that is very good at one particular task. It is good for transferring money, but it was not designed as a foundational layer for any kind of protocols to be built on top.”

Analyzing any cryptocurrency is a headache but don’t take tension by the end of the article you will easily get to know which one is better. You will get all your answers like who is the winner Bitcoin or Ethereum? You should invest in Bitcoin or in Ethereum?

Bitcoin and Ethereum are not rivals of each other. Their goal is different from each other. Bitcoin is developed for making payments or transactions easier whereas Ethereum gives a platform to develop smart contracts.  When we compare the technical aspects of both then Ethereum is ahead as it offers a programming language and also gives a faster transaction experience when compared with Bitcoin. Although Bitcoin is on number one rank Ethereum technology is most widely adopted. 

Indeed, this is the fundamental difference. Ethereum is an open-source platform and a programming language for building and publishing applications. More fundamentally, it is a Turing-complete virtual machine that can run any script and cryptocurrency project. This forms the basis for currency issuance and the building of decentralized applications and is the reason why many of the initial coin offerings (ICOs) are based on the Ethereum platform.

By contrast, Bitcoin’s scripting language is limited to transactional processing. It does not have the set of instructions to act like a fully-featured programming language where applications can be built on top.

Now take a look at the coin supply of both platforms. Bitcoin has a limited supply which is of 21,000,000 which is good for a store of worth. Whereas Ethereum has no limit. Ether is continuously producing but the supply of this coin will slow down drastically anyway. Moreover, the founder of Ethereum has said that the total number of coins will not cross the limit of 100,000,000 in upcoming years.

Because of the differences in complexity at the protocol level, there are differences in security. Due to Ethereum’s complexity, it presents a wider attack surface to hackers, making it a less secure store of value. The attack on the DAO (an Ethereum-based ICO) which led to the theft of $60 million in Ether is a case in point. Besides, Bitcoin is more secure because of significant infrastructure investment by Bitcoin miners. The greater Bitcoin hash rate means that the cost to control 51% and attack the Bitcoin network is proportionately greater.

There is a great difference between the uses of Ethereum and Bitcoins. As you know Bitcoin is a truly digital currency and you can utilize it to send or receive money. You can buy goods with Bitcoin on many famous sites. Bitcoin is also used to invest money and you can invest in Bitcoin for long-term or short-term like other touchable coins.

On the other hand, Ethereum is not so famous for buying goods. Usually, Ethereum technology is used by the developers to create applications for smoothing transactions on the blockchain. The value of Ethereum will increase with the increasing number of apps build on it. 

There are other differences in terms of technological set up which impacts economics. The Bitcoin blockchain is composed of 1-megabyte blocks which are mined on average every 10 minutes. It can only process around 3 transactions per second. By contrast, the Ethereum blockchain has blocks of adaptive size, which are mined on average every 15 seconds. It can process around 25 transactions per second.

Transaction fees matter a lot and also the noticeable point when adopting any technology. Here is also Ethereum leads because it offers you the lower transaction fees when compared with Bitcoin. It is reported that the transaction fees of BTC are up to 40% of the transaction block value. On the other hand, Ethereum charges up to 10% of the  ETH block value.

Conclusion

Due to their very different protocol designs, we may regard them as complementary in the blockchain economy, with Bitcoin as a monetary system and store of value, and Ethereum as a platform for currency issuance and decentralized applications.

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