Bitcoin vs Ethereum: Whats the Difference?

Numerous cryptocurrencies have launched as ERC-20 tokens and have been distributed through initial coin offerings. Tastylive content is created, produced, and provided solely by tastylive, Inc. (“tastylive”) and is for informational and educational purposes only. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. Tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations.

Ethereum vs Bitcoin

Now even though Ethereum has easily crossed the 100 million mark, the market capitalization for Bitcoin is $781 billion, whereas for Ethereum it’s only $368 billion. So even though Ethereum has more coins on the market, it isn’t at the level of Bitcoin. Bitcoin has also experienced change, introducing the Taproot upgrade to enable smart contracts. The Bitcoin Lightning Network is another project being worked on as a second-layer protocol that intends to take transactions off-chain for the purpose of speeding up the network.


Whereas Bitcoin serves 1 function as a store of value, Ethereum’s flexibility gives its blockchain network limitless potential. That depends who you ask and what your needs are, as both systems were designed to do slightly different things—despite both using blockchain technology. Bitcoin was the Ethereum vs Bitcoin first cryptocurrency to be created; as mentioned, it was released in 2009 by Satoshi Nakamoto. It is not known if this is a person or group of people, or if the person or people are alive or dead. Ethereum, as noted above, was released in 2015 by a researcher and programmer named Vitalik Buterin.

Ethereum vs Bitcoin

That being said, the Ethereum network can process more transactions per second than the Bitcoin network, and is less energy intensive. A validator is a staking participant who has staked at least 32 ETH and they earn rewards for staking their ETH. Bitcoin has a hard-capped supply of 21,000,000 BTC, and Proof of Work is how new bitcoins are created. There is an infinite supply of ETH available, and now that Ethereum is using Proof of Stake they no longer utilize miners, but rather validators. Bitcoin has always operated on a Proof of Work consensus mechanism, and since it’s such a core part of Bitcoin’s monetary policy, this will likely never change.

Main Takeaways: Bitcoin vs. Ethereum

Most notably, we see ETH increasing its market share by 0.89 percentage points over the past seven days, while BTC’s market share is down 0.96 percentage points. While Active addresses are flat year-on-year (+5%), they are 113% higher than three years ago, again outperforming Bitcoin, which was down 30% over the same period. 84% of retail investor accounts lose money when trading CFDs with this provider.

In 2014, Ethereum launched a presale for ether, which received an overwhelming response. Over the years, the virtual, decentralized currency concept has gained acceptance among regulators and government bodies. Ethereum applications and contracts are powered by ether, the Ethereum network’s currency. Full BioNathan Reiff has been writing expert articles and news about financial topics such as investing and trading, cryptocurrency, ETFs, and alternative investments on Investopedia since 2016. Ethereum, however, has thousands of different applications that run on it, and most of these apps have their own tokens.

Pros and Cons of Investing in Ethereum

Bitcoin’s economic setup has been pitched to custodial institutions as a better way to run national and organizational finance. This is based on bitcoin’s hard-stamped supply and conditional deflationary supply. Bitcoin’s supply is pegged at 21 million, and a good percentage of the circulating supply has already been mined. The remaining supply will be distributed over time to miners on the network.

Ethereum vs Bitcoin

Bitcoin is primarily used as a store of value and a medium of exchange. Ethereum is used mainly as a platform for decentralized applications and smart contracts. Bitcoin and Ethereum have a large market capacity, with Bitcoin having a slightly larger one. Bitcoin is mainly used as a digital currency, while Ethereum is used for its smart contracts feature. Ethereum is an alternative cryptocurrency, with different goals and design features than Bitcoin.

Bitcoin vs Ethereum Price Volatility

EVMs have been implemented in C++, C#, Go, Haskell, Java, JavaScript, Python, Ruby, Rust, Elixir, Erlang, and soon[when? They are both cryptocurrencies, and together, they make up more than half of the overall crypto market. Others claim that blockchain technology can be made more scalable through technical improvements. Finally, some plan to scale using layers on top of the base blockchain. Another important aspect of decentralization is that a small group of developers should not have unilateral decision-making authority over the rules and operation of the network. Bitcoin developers write the code to implement upgrades and protocol changes, but they deliberately do not push these changes on users.

  • One of the earliest DAOs in existence, simply called “The DAO,” raised $150 million in ether through a sale meant to last 28 days.
  • Researching Bitcoin vs Ethereum leads to a deeper discussion of what blockchain technology can do to improve every aspect of our lives.
  • Ethereum’s co-founder Vitalik Buterin added a piece of code to the mainnet to stop the hacker from transferring stolen ETH.
  • In order to successfully establish security, immutability, and decentralization, blockchains are slow and can process a limited number of transactions per second.

While Ethereum’s security has improved over time, it still lags behind Bitcoin in terms of reliability and security. Bitcoin miners receive rewards when they successfully complete puzzles, while. Ethereum produces a token called Ether, which powers the decentralized apps on the Ethereum blockchain. It remains anyone’s guess which cryptocurrency and blockchain will stand the test of time—perhaps they both will. But one thing is certain—both have induced much-needed discussions about financial systems worldwide. The potential applications of Ethereum are wide-ranging and are powered by its native cryptographic token, ether .

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Both systems use blockchain technology to validate and record transactions. Still, forthcoming changes to Ethereum, commonly referred to as Ethereum 2.0, should significantly update the crypto’s speed, sustainability and accessibility. Regardless, and as is the case with all cryptocurrencies, BTC and ETH are both volatile. Prices are unpredictable and prone to crashes, as we saw in May of this yearwhen the market capitalisation of crypto assets fellto around $US900 billion — down from $US3 trillion. A DAO, or a decentralized autonomous organization, is a collective where each user is accountable to all other DAO members, eliminating the need for a regulatory body.

Bitcoin’s Tenacity is the oldest and most trusted provider of crypto products. Basically, this means that a small group of users that hold a majority of the staked ETH have more authority in the Ethereum ecosystem, something many critics consider to be a degradation of decentralization. A major point of contention in the Ethereum vs. Bitcoin debate is that of decentralization.