Bitcoin and Ethereum by far, are the most valuable cryptocurrencies in the crypto world now, considering their market cap of $120,570,137,286 and $29,214,512,873 respectively, at the time this piece was written. For some years now, these two digital coins have gain global acceptance and recognition, thanks to the unprecedented rise in their market value.
Bitcoin is the largest coin on the market since its breakthrough in 2008, however, it hasn’t been all that simple, as Ethereum has rivaled it for the most dominant coin, even though a factor for its rise has also been the constant comparison to Bitcoin.
Bitcoin and Ethereum both, are of a decentralized network, without any control from a centralized body. They both are also equipped with similar features such as anonymous transactions.
Individually, both coins can boast of some pretty important feature, with Ethereum being more than just a digital currency. It is also a blockchain-based platform, equipped with many features.
It comes with the Ethereum Virtual Machine, smart contracts and its ether peer-to-peer contracts. Bitcoin on the other hand boost of lower transaction fees and no physical bitcoin but only balances associated with public and private keys.
Despite both coins being run by the principle of cryptography and distributed ledgers and, they still differ in many ways and investors need to know some of the vital differences and below are three of them.
- Purpose of Coin
Both coins were created with different aims and I think that’s the most important thing to know here. Bitcoin is seen as a substitute to fiat currency and as such, it is used as a medium of payment transactions and store of value.
Ethereum was also created as a platform which enables peer-to-peer contracts and applications through its own currency. Ethereum primarily seeks to help developers to build and run distributed applications.
- Currency Cap
Bitcoin’s currency cap is limited to 21 million bitcoins and of this 21 million, 17 million have been created until now. Ethereum however currently has no hard currency cap even though plans are underway to reduce or halt issuance in the next few years. As at December last year, there were roughly 100 million ethers.
- Block Creation
Bitcoin block creation takes an average time of about 10 minutes, whiles Ethereum creates a new block every 15 seconds but aims to be 12 seconds. Ethereum has the upper hand here because a faster block time means a quicker rate of confirmations.
This flash-esque manner is enabled by Ethereum’s Ghost protocol. However, there is also the presence of numerous orphaned blocks in its network.