Bitcoin has always been the leading cryptocurrency running the show for quite some time now until in the year 2014 when everything changed. During that year, Ethereum was announced during the North American Bitcoin Conference and since then, it also started gaining popularity and many comparisons between Ethereum vs Bitcoin followed.
Many people have had debates, of which of the two is better to invest in. This also drove us to do a thorough research and come up with an Ethereum vs Bitcoin report, based on different aspects as we shall see below hoping by the end of the article you will have clear differences of the two cryptocurrencies.
Let’s us first find out the origins of the two before anything else.
Bitcoin
It was created and founded on January 3, 2009. It was created to be a peer to peer system which was suburbanized. It uses C++ language for programming. The language does not have more than 70 commands that are to be used in the provision of high-security levels.
Bitcoin uses a working model that helps improve security by monitoring and verifying all transactions. The circulation of Bitcoin is done through mining which offers a rate of 12.4 Bitcoin for every block after a transaction.
Ethereum
It was created and launched on July 30, 2015. Ethereum is a platform that operates online and it allows even smart contracts. Its system is decentralized and gives a bigger range by giving investors the permit to develop and manage an application on its own platform. Ethereum does not focus on just being an alternative for payment like Bitcoin does.
Ethereum uses Turing language, which has 7 programming languages and it can program different contracts using the Turin languages. The languages create convenience and operations are run smoothly.
After every transaction, the rate Ethereum offers is 5 per every block. This rate is consistent because there are no limitations on this asset.
- We are going to break down the comparisons into different minor topics for better understanding.
1. What Can You Do With the Two?
Bitcoin
It can be used to both send money and receive it. Bitcoin is famously also used to buy goods from other websites such as Overstock.com, Tesla, and Namecheap.
With bitcoin, you can hold on it as an investment and store it for a long time until it adds values.
Ethereum
It can be used to purchase goods but most people use Bitcoin. Instead, it’s mostly used to create applications by developers.
With many apps being created every day, Ethereum is most likely to be used more often in the near future.
2. Storage
Whenever you buy a digital currency, it is recommended to you to store it in a cold storage because your coins are more secure in the storage since it is offline.
Both Bitcoin and Ethereum are stored in this storage using devices such as Ledger or Trezor.
3. Tokens Available – Ethereum vs Bitcoin
Bitcoin
Currently, the total amount of Bitcoin supply cap is at 21 million, while the supply circulating is at 18.5 million.
It is estimated that after every 10 minutes, a new Bitcoin is created but after some time Bitcoin might not be generated anymore. This is one of the reasons why Bitcoin, is considered to be a deflation.
Ethereum
A new Ethereum is generated after every 14 seconds. Therefore, a lot of time and energy is saved since it uses a variety of languages.
The total amount circulating is approximately 96.8 million.
4. Costs & Fees – Ethereum vs Bitcoin
Bitcoin
With Bitcoin, the fees charged for transaction depend on the blocks and the time used. If the time used is from 5-14 minutes, you will pay more money than if it took 15- 30 minutes. The shorter time you want your transaction to take, the more money you are expected to pay. The fee for 4 blocks is higher than that of 8 blocks. The transaction fees are around 35% of the value of the transaction block.
Ethereum
The transaction fee is charged using a process of steps. The Ethereum gas price is measured every minute in Szabos (0.000001 Ether = 1 Szabo). The gas price is then multiplied by the total of Ethereum gas in every block of the Ethereum blockchain system. The transaction fee is, therefore, lower because it is around 10% of the Ethereum block value.
Also Read All that You Should Know About Bitcoins and How Does Bitcoin Works – A Detailed Overview
5. From Where Can You Buy Them?
Both Bitcoin and Ethereum can be bought from Coinbase, which is the best common platform. You can also buy both Bitcoin and Ethereum from other exchanges such as Kraken and Gdax, which belongs to Coinbase.
6. Market Definitions
In terms of the levels of prices in cryptocurrency, Bitcoin’s market share has devalued. In 2017 it decreased from 90% to 41% and it is expected to depreciate even more this year.
The working model of Bitcoin has led to rising of interferences that lead to a lot of time being wasted and also energy. Yes, it could be secure but the time used to purchase one block reduces the possibility of gaining much profit.
Ethereum
It focuses on making a rise in the crypto market price as well as the crypto market share. That is why; it uses proof of stake model instead and in return, impacting the behaviors of customers worldwide.
The fact that you can create a block in a shorter time compared to Bitcoin, gives Ethereum an opening of increasing and leading in the cryptocurrency, with the variety of languages it offers being an added advantage.
The costs are also greatly reduced because the energy consumed to create a block is lesser than that of Bitcoin and it takes lesser time. Energy is saved by 98% compared that of Bitcoin and soon, Bitcoin might lack the energy resources to use in its mining processes because of the proof of work model. This earns it more points in the debate of Ethereum vs Bitcoin.
7. Back up – Ethereum vs Bitcoin
Bitcoin
Bitcoin is not valuable, neither is it backed up by anything. Its market value keeps on depleting drastically every time. The transaction fees are very high yet they take a long time compared to Ethereum and other cryptos.
After your transaction, the Bitcoin miner collects it and puts it in the Blockchain system. This is why; the transactions have become many because of the increase in prices of Bitcoins and the transaction period takes long in return.
Ethereum
It is fast enough as we previously saw. The inventor is planning to create systems that will consider the needs of investors such as;
- You will be able to store, share and get access to the records of patients. A patient will also get access to healthcare services even in a foreign country because their records will be online.
- Ethereum will be used for security because it is decentralized. Therefore, only you will have access to your information because the blockchain technology inhibits another person from getting your information.
- You will be able to vote even while in a foreign country and it will be shown publicly for accountability.
- The smart contracts allow you to exchange with anything valuable, hence, there are no risks involved because the transaction is computerized.
- You’ll also be able to gamble without paying any extra money because Ethereum technology, will not allow any theft and scams.
- You will also store your data and transfer it faster to up to millions of servers through the Ethereum technology.
- The self-driving of cars will also be made more secure and communication made easier through the partnership of Ethereum and Google project planning to invent self-driving cars by 2020.
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