Bitcoin and Ethereum, these two cryptos among thousands of others are the two largest cryptocurrencies. Bitcoin mining is considered the gold of cryptocurrencies and Ethereum on the other hand is considered to be the silver of cryptocurrencies. These two can be considered as brands coca-cola and Pepsi, these two cryptocurrencies are the humongous giants of the crypto world.
Bitcoin the innovative crypto that was published in 2009, started gaining people’s attraction from the early days, and eventually, it has becomethe largest among all the cryptocurrencies. And the second largest cryptocurrency that is Ethereum was launched in 2015, and somehow within a matter of a few years, it has made itself the silver of cryptocurrencies. Both of these coins often face competition.
nd bitcoins are technological ecosystems and Lower case b and ether are the digital currencies used by these two ecological systems. If you are new to the world of cryptocurrencies, you might be confused about which one of these is the best for you. This article will substantially elaborate upon the features and differences between both cryptocurrencies.
- Consensus Mechanism
Both ecological systems have different consensus mechanisms. Before moving on to the subjective consensus mechanism used by Bitcoin and Ethereum let’s try to wrap our heads around the consensus mechanism. The consensus Mechanism is the computer algorithm used to make blockchain viable.
This phenomenon is done after solving the ‘Double spend’ problem. Bitcoin’s consensus mechanism is ‘proof of work’ while the consensus mechanism of Ethereum is ‘proof of stake’.
The consensus mechanism of ‘proof of work’ that is used by the bitcoin network, needs complex computation to get the transaction registered on the blockchain ladder. Proof of work systems of Bitcoin uses lots of energy to prevent fraud. According to data, currently, bitcoin uses 19TWh of electricity per year.
On the other hand, the cryptocurrency Ethereum uses the Proof of stake method. It is a consensus mechanism. Proof of stake requires participants to stake money for getting the transaction validated. And add the block of a transaction to the existing blockchain. Proof of stake allows an individual with more crypto to validate the transaction and protect against fraudulent bad actors with penalties.
Be sure to avail more knowledge about cryptocurrencies in general.
- Decentralized payments and Decentralized systems
Bitcoin and Ethereum are digital currencies that both work upon the technology of blockchain and remain decentralized. Bitcoin was developed to facilitate the exchanges and transfer of currencies without any intermediaries or third parties.
The main aim of Bitcoin was to replace the hassle of transactions and exchanges carried out by intermediaries. And, it is used as an exchanging currency too like a trading asset. This makes Bitcoin the most liquid asset among 9,500 cryptocurrencies.
But, Ethereum is much more than the mode of transaction and exchanges of digital currency. Ethereum was meant to promote decentralized software such as Dapps and smart contracts. Smart Contracts make the property sale and transfer of ownership easier and immune them to fraud. Decentralized apps allow individuals to transfer data without an intermediary.
- Value of Store
Bitcoin has the largest value in the store. BTC’s price value was $64,000 in November 2021, and the price value of Ethereum was $4,600. Bitcoin transaction takes 2-3 minutes to be completed while Ethereum transaction is done within 12 to 14 seconds. The market cap of Bitcoin is $1.08 trillion and holds 48% of the market share. Ethereum holds a market share of 23.4% with a market capitalization of %528 billion.
The supply chain of Bitcoin is 21 million and it is fixed. Only 21 million bitcoins will only be created in eternity. This means the price value of Bitcoin will keep increasing day by day. Ethereum or ether has an infinite supply chain.
Final Statement
Bitcoin stems to facilitate the transfer and exchange of digital currencies and was created as a digital alternative to traditional currencies. Bitcoin is the largest liquid asset. On the other hand, if you are looking for more than the transfer and exchange of digital currency then, Ethereum is something you might prefer because Ethereum can be used for digital currency transfer at the same time it is a programmable blockchain that facilitates DeFI, smart contracts, etc. Thus, you need to reflect upon your needs, demands, and aspiration for getting into cryptocurrencies.
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