Bitcoin and Ethereum — these 2 names in the crypto industry are most commonly known to everyone. Some may ask, which crypto is better? Let’s first take a look at the history of each digital asset.
Bitcoin was created in 2009 by Satoshi Nakamoto. Its purpose is to be a decentralised, non-physical currency which is unlike fiat currencies. Bitcoin is created, distributed, traded and stored using blockchain — decentralised ledger system. It is the first digital currency to successfully allow peer-to-peer payments.
As the pioneer digital currency, Bitcoin had a market cap of $150 billion in the beginning of 2020, whereas Ethereum had a market cap of $16 billion. Fast forward to January 2021, Bitcoin’s market cap was $600 billion and Ethereum’s market cap grew to almost ¼ of Bitcoin’s market cap.
Founded by Vitalik Buterin and other crypto entrepreneurs in 2013, Ethereum is a decentralised and blockchain-based computing platform used for its native cryptocurrency, Ether. Ethereum allows people to build decentralised apps (dApps) on its blockchain and requires Ether as gas to run dApps.
Similarities and Differences
Both Bitcoin and Ethereum are decentralised and based on blockchain technology. However, it is important to note that Bitcoin and Ethereum are different in many aspects.
Bitcoin is a decentralised alternative to traditional fiat currencies. It is a cryptocurrency with the primary purpose of being a store of value and medium of exchange. Ethereum, on the other hand, is designed as a De-Fi platform to facilitate programmatic contracts and applications via its native cryptocurrency, Ether.
Ethereum has an upper hand when it comes to its speed of adding a block to the blockchain and completing a transaction. Ethereum takes 12 to 15 seconds to add a block whereas it takes Bitcoin around 10 minutes. Also, Ethereum processes 10 to 15 transactions per second whereas Bitcoin processes 3 to 5 transactions per second.
Bitcoin has a finite supply for 21 million BTC, hence its appeal as a store of value and investment against inflation. On the flip side, Ethereum has an unlimited supply of Ether but it limits the amount of Ether released each year.
Before Bitcoin and Ethereum maximalists start arguing over which crypto is better, we can always diversify our portfolio by including both Bitcoin and Ether in it. By the way, you can trade Bitcoin (BTC) and Ether (ETH) on Bitwewe.