The crypto market is witnessing explosive trading volumes and all-time highs in market capitalization thanks to the massive influx of both retail and institutional traders.But the top two cryptocurrencies are still Bitcoin and Ethereum. While both are called cryptocurrencies, there are major differences between them when it comes to their platforms and use cases.
How Bitcoin and Ethereum are different
Bitcoin was the first true cryptocurrency that was in circulation in 2009. Years later, precisely in 2019, Ethereum followed. However, between Bitcoin’s circulation and Ethereum’s launch, other cryptocurrencies also sprang up. These crypto-assets were launched to improve certain aspects of Bitcoin’s performance such as its speed.
Bitcoin and Ethereum’s speed
Speed is one of the major differences between Bitcoin and Ethereum. Bitcoin’s network is not as fast as Ethereum’s network. While Bitcoin takes minutes to complete transactions, Ethereum takes seconds. Additionally, Ethereum is a blockchain-based platform just Bitcoin.
But while the Bitcoin blockchain can be seen as a database of accounts (or wallets ) with a certain amount of currency stored within, the Ethereum platform is more sophisticated and complex. The network can store computer codes that can use the power of the central processing unit to execute applications.
Ethereum’s currency is represented by Ether (or ETH). The thinking here is that ETH will be transacted by individuals, the government, and businesses. On the other hand, Bitcoin has no use case rather than as a store of value. It was created as an alternative to fiat currency, and many have touted it as the future of the world’s currency.
There are other differences between Bitcoin and Ethereum. Data on the Bitcoin network transactions are used only for keeping notes, while transactions on the Ethereum network contain executable codes. Also, Bitcoin and Ethereum use different algorithms, as the former uses SHA-256 while the latter utilizes ethash.
The Bitcoin and Ethereum networks are also different when it comes to their overall aims and goals. Ethereum wasn’t created to be seen as an alternative monetary system, unlike Bitcoin whose purpose was to be taken as a store of volume. Ether’s main purpose is to facilitate programmable and immutable contracts through its ETH cryptocurrency.
As a result, Ethereum is not really in direct competition with Bitcoin even though both of them were born out of blockchain technology.