Ethereum vs. Bitcoin: Which is better?

A comparison between two of the thousands of cryptocurrencies that exist in the market but that are the first alternatives for users. Find out why in this article.

Comparison of Ethereum and Bitcoin.

Currently there are about 1,600 cryptocurrencies in use around the world. Of these, Ethereum and Bitcoin are among the top three.

The question is, which of them is the best and why. According to Yahoo Finance, the first could surpass the second, due to the fact that it offers a more versatile alternative in terms of custom contracts.

However, how is the comparison made exactly between Ethereum and Bitcoin, in terms of their features and uses, among other aspects, and which one is better seen towards the future.

With the short life that cryptocurrencies have, these questions are duplicated every day, gaining more and more relevance among those who have decided to use these platforms to carry out commercial transactions in a fast and secure way.

Join us, because in this article we are going to discover everything about this interesting topic. Let’s go!

Index

What is a cryptocurrency?

A cryptocurrency works in a very similar way to a regular currency, called fiduciaries. However, the main difference lies in the fact that cryptocurrencies are decentralized.

This means that these digital currencies do not have a central authority, such as a government or a bank, which exercise some type of control over them and who use them.

Likewise, one of the essential characteristics has to do with the fact that they use blockchain, a association of records that are located in a kind of container called “block”.

It is worth mentioning that the transactions that are carried out with the use of cryptocurrencies are kept public, as well as in chronological order.

What is Bitcoin?

Bitcoin (BTC) was launched in 2009 by an individual or a group of individuals known as Satoshi Nakamoto, which allows you to send and receive money around the world.

Investors have the power to think of Bitcoin as a value reserve, including gold, or also as a digital currency that can be used to make fast and reliable transactions.

However, it is important to keep in mind that this is a non-sovereign currency. One of the most essential points of Bitcoin is that it allows you to keep the identity of those who receive or send money anonymous.

Matt Hougan, director of Crypto ETF Investments, and Bitwise Asset Management index fund provider, says that anyone who buys Bitcoin is buying a monetary asset.

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While Thomas Perfumo, head of Commercial Operations and Strategy of Kraken, states that this cryptocurrency is an alternative form of money and obtains a value from “an incredibly medium approach to decentralization and security, through proof of work mining”.

What is Ethereum?

Ethereum (ETH) was born in 2015 at the hands of Vitalik Buterin, and is a currency that provides ether tokens, which is equivalent to bitcoins on the Bitcoin network.

Ether is used to create and implement decentralized applications, whose back-end code is placed on a peer-to-peer distributed network, which is different from a regular application where such code is located on a centralized server.

Ether operates very similarly to Bitcoin and can be used for peer-to-peer payments, as well as for the creation of smart contracts.

These smart contracts work in such a way that when a specific set of predetermined rules is met, a certain result is generated.

What are the differences between Bitcoin and Ethereum?

The difference between two of the world’s most popular cryptocurrencies is based on some important factors that we will mention below. Take note!

History

  • As we have said before, Bitcoin was the first cryptocurrency created in 2009, while Ethereum was launched in 2015 by a researcher and programmer called Vitalik Buterin.
  • The creator of Ethereum used the concepts of blockchain and Bitcoin and provided much more functionality, that is, he created a platform for distributed applications and smart contracts.

Concepts

  • Bitcoin provides the possibility of carrying out transactions between peers, without the problems that arise with a common currency, that is, it does not have to pay high transaction fees, nor does it have a centralized authority.
  • On the other hand, Ethereum also offers the opportunity to carry out transactions between peers, but at the same time puts at the service a platform for creating distributed applications and smart contracts, which allow exchanging almost anything that has value, including real estate, money or shares.

Rate

  • Bitcoin offers optional rates and may or may not pay more money to the miner in order to pay special attention to the transaction.
  • In the case of Ethereum, it must offer a certain amount of ether, in order to make its transaction successful.

Mining

  • In Bitcoin, miners can validate transactions through a method that is identified as proof of work, in order to be the first to – after doing some mathematical calculations – add a block to the blockchain.
  • Meanwhile, Ethereum works in order to move to a different form of transaction validation, which has been identified as proof of participation, which consists of a person being able to validate or extract transactions in a block, according to the amount of coins they have.
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What is the market share of Bitcoin and Ethereum in the cryptocurrency market?

Even though Ethereum easily surpassed the 100 million mark, the reality is that Bitcoin’s capitalization is $781 billion, while Ethereum’s is $368 billion.

The number of Bitcoin transactions carried out on a normal day is around 260,000, while in the case of Ethereum it is 1.2 million.

In terms of the number of blocks mined, Bitcoin exceeds 718,000, while Ethereum is around 13 million.

Experts say this has a lot to do with the fact that it takes much less time to add a block to Ethereum than to Bitcoin.

Will Ethereum surpass Bitcoin in value?

Bitcoin will always be valuable to investors because it was the first. However, although Ethereum has its problems to solve, it has great potential for the future.

And that’s because expectations are focused on Ethereum going through a series of updates in the next few years, which will allow it to increase its transactions by more than 1,000 times.

In fact, experts believe it will be the chosen cryptocurrency in the next 12 months. This reality will make Bitcoin think about how to maintain its authority in the market, in order to continue being the leader.

How many BTC and ETH are currently in circulation?

Bitcoin has more than 18 million bitcoins in circulation, while Ethereum has around 118 million ether.

This means that although Ethereum has more coins in circulation, it is not yet at the level of Bitcoin.

Experts in the field assert that even though the value of the Bitcoin market is much greater than that of any digital currency that resembles it, Ethereum is still very close and they hope that it will reach it at some point.

Conclusion

At this point you should already know the big differences between the two most popular cryptocurrencies in the world and what the predictions are for the immediate future.

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