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Bitcoin vs. Ethereum: Important Differences

Whether you’re a newbie or an experienced crypto trader, you probably know that you can find two names at the top of the long list of cryptocurrencies: Bitcoin and Ethereum. Since these two were the first cryptocurrencies to emerge, it’s only reasonable that they tend to be more robust compared to other digital currencies that followed them. If you are looking for the best cryptocurrency to invest in, it’s natural to focus on these top two cryptos.  We’ve compiled the key differences between these two notable cryptocurrencies to give you an idea. Read on to learn the significant distinctions between the two.

Cryptocurrency

Over the years, Bitcoin and Ethereum retained their spot as the top cryptocurrencies, but which is the better choice? With hundreds to thousands of cryptos in the market, it can be frustrating to choose one that guarantees security can be frustrating. This explains why most traders seek help from the experts at Bitcoin Loophole. This platform connects traders to reputable brokers in the market who have advanced skills and unmatched knowledge to ensure your career will bring fruitful results. 

Bitcoin

Bitcoin was launched in 2009 by an anonymous developer named Satoshi Nakamoto.

Unlike traditional currencies issued by banks or governments, Satoshi created Bitcoin to secure online cryptocurrency without a central authority. Known as the first cryptocurrency and deemed as having a value digital equivalent to gold, it’s no wonder why Bitcoin is currently the most valuable crypto in the market.

As of today, Bitcoin has a market cap of 370.84 Billion, and more and more investors prefer having this crypto in their portfolios. Years after the release of Bitcoin, the concept of decentralized digital currency has left the public in awe, allowing governments worldwide to engage and accept cryptocurrency as a mode of payment. Although Bitcoin is still not recognized as a formal payment method, cryptocurrencies continue to exist in the financial system.

Ethereum

Launched in 2015, Ethereum immediately captured the trader’s attention and became the most well-established and largest platform. This crypto also enables the launch of decentralised applications and smart contracts, also known as DApps, which can run without any control or interference from any third party. This crypto is software that developers use to build cryptocurrency-related applications.

Buying Ethereum opens the doors to unlimited possibilities as it has a remarkable ability to create smart contracts, making financial transactions secure and faster. As an open-source technology, Ethereum offers endless opportunities and allows users to create new applications. Ethereum transactions are faster but are less energy-intensive as compared to Bitcoin. Plus, it still has a long way to go regarding being widely accepted worldwide.

Cryptocurrency Advantages

As the first two cryptocurrencies to be developed, Bitcoin and Ethereum are crowd favorites. To further understand how these two can benefit your career, check out the key benefits of Bitcoin and Ethereum.

1. Easy to trade

When choosing a cryptocurrency to trade in, one crucial factor you should consider is the ease of trading. Before cryptocurrencies were introduced, people used traditional methods such as stocks and real estate to trade. While there’s nothing wrong with that, trading with those methods was pretty complicated due to the hassle number of steps you need to follow – not to mention the government could interfere anytime.

Bitcoin trading does not involve third-party agents like banks or the government, so the transaction process is easy to follow and secure. 

2. Available 24/7

One significant benefit of cryptocurrency trading over traditional trading is the allowed time when you can do transactions. With traditional trading, you’re only allowed to buy, sell, or trade transactions at a specific time, prompting you to make up your mind and finish all your important transactions within the given time. 

On the other hand, Bitcoin and Ethereum trading is available 24/7. You don’t have to wait hours to complete your transactions, as it can be done in minutes and a few clicks. Plus, you don’t have to worry about the values of cryptos changing at midnight because you have the control to buy, trade, or sell cryptos anytime you prefer

4. Trade anywhere

One main issue of traditional trading, like real estate, is the complicated process due to geographical restrictions. This means that traders might experience a hard time buying or selling real estate in another country because of the government’s control over these things. 

Cryptocurrency is the best trade method since it has no geographical restrictions. The increasing number of countries that use cryptocurrencies makes the trading process smooth and quick, no matter where you are. Buying or selling cryptocurrencies across your country’s geographical boundaries is possible with crypto and allows you to have a smooth and quick experience.

Bitcoin Vs. Ethereum: Key Differences

While most people in the crypto-verse believe that Bitcoin and Ethereum are rivals because of their first and second spots on the list, the truth is they are not – they complement each other. Although both these networks are powered by distributed cryptography and ledgers, the two differ in various ways. To give you an idea, we’ve collected three main differences between Bitcoin and Ethereum:

1. Consensus Protocol

Bitcoin uses proof of work (PoW), a protocol that allows the network nodes to agree on the state of all information recorded and prevent certain types of attacks on the network. On the other hand, Ethereum moved to proof of stake (PoS), a set of upgrades that makes the platform sustainable and secure. 

One major criticism of proof of work is that it is highly energy-intensive due to the computational power required. Meanwhile, proof of stake substitutes computational power with staking, which is less energy-intensive.

2. Purpose

While Bitcoin and Ethereum are digital currencies, they have different purposes for creating them. Bitcoin was designed as an alternative monetary system that improves user experience without relying on a central authority. On the other hand, Ether was not made for this purpose; this crypto aims to facilitate and monetise the operation of smart contracts, dApps, and other blockchain solutions.

3. Future

Thanks to the increasing popularity of dApps in business sectors such as finance, gaming, technology, and arts, Ethereum is growing by leaps and bounds. Ethereum is also expected to introduce sharding sometime in 2023 to enhance its scalability issues. Bitcoin has also implemented a project to enable smart contracts – the Taproot upgrade. The Bitcoin Lightning Network is a second-layer protocol to speed up the network and processes and increase security. 

Which Should You Buy?

Going for Bitcoin or Ethereum is a personal decision. These top two cryptocurrencies offer advantages that can help further your career but also comes with risks that may end them. While these two are expected to grow significantly in the coming years as more countries and businesses accept and incorporate cryptos, Bitcoin is deemed the more public-friendly and dependable. 

Nevertheless, whichever you choose, you must consider the risk level and other variables. Make sure to do extensive research about these cryptocurrencies, their benefits and drawbacks, and think about long-term effects before deciding.

Conclusion

Although cryptocurrency comes with rewarding benefits, it’s still risky. But knowing how to manage the risks and making wise decisions will bring you wonders. Bitcoin and Ethereum are two top cryptos that were created with different purposes but are valuable on their own. Whatever cryptos you plan on investing in, it is necessary to research beforehand and ensure that you have a high-risk tolerance.