Bitcoin and Ethereum are the most known digital coins globally. They are listed on all crypto platforms, and the ETH BTC pair is one of the most traded. In February 2023, the Bitcoin rate was $24,060, with the cap surpassing $462 billion, while the ETH price was $1,651, with a cap of over $202 billion.
Even though they run on blockchain technology, there exist several essential distinctions between them. In this essay, we will uncover the primary distinctions between these two assets.
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BTC and ETH Comparison
Let’s go through the crucial characteristics:
- Goal. Bitcoin is a decentralized crypto that enables users to make direct p2p transactions without requiring financial institutions as intermediaries. In stark contrast, Ethereum serves as a space for developers to construct dApps and intelligent contracts in order to fuel the decentralization movement.
- Technology. Blockchain is the foundational element for both assets, as it offers a decentralized ledger to keep track of all operations with coins. To secure these networks, both cryptocurrencies use various algorithms. For instance, Bitcoin’s Proof-of-Work (PoW) algorithm requires miners to solve mathematical equations to get rewarded with newly minted coins. On the other hand, Ethereum relies on its own version, known as Proof-of-Stake (PoS). With this system, validators must stake a certain amount of Ether tokens in exchange for rewards when they validate transactions correctly.
- Transaction speed and cost. Ethereum transactions are much faster and more reliable than Bitcoin, allowing users to get their payments confirmed in 15 seconds versus 10 minutes. In addition, Ethereum’s transaction fees tend to be far lower than those of Bitcoin during times of high network activity or usage.
- Supply. Bitcoin and Ethereum differ significantly when it comes to their supply limit. Bitcoin is limited with an inflexible cap of 21 million coins, meaning that no more than this amount will ever be circulated. In contrast, Ethereum has a variable issuance rate which suggests its total supply can rise over time without restrictions.
- Smart contracts are self-executing agreements with the details of a buyer/seller deal encoded directly into lines of code. Unlike the first crypto – BTC, Ethereum was specifically designed to facilitate this type of arrangement, making it an ideal network for developers wishing to construct decentralized applications.
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