Bitcoin vs Ethereum: What is the Real Difference?

Bitcoin vs Ethereum are two digital-assets with a never-ending tale. And while both are the most valuable cryptocurrencies as at month three of quarter three of 2020, subtle differences persist.

Bitcoin leads in market capitation, with up five times that of Ethereum.

Coincidental similarities also prevail. However, more critical distinctions require to be drawn for a stakeholder, and clarity shed regarding why one prefers any for the other.

While Ethereum’s founder Vitalik Buterin is a familiar figure,  Bitcoin’s Satoshi Nakamoto remains a pseudonym. A point that always raises scepticism and room for conspiracy theories regarding why Nakamoto’s real identity remains unclear.

From a developer’s point of view, every blockchain has a unique purpose, and the same is explicitly applicable for Bitcoin and Ethereum.  Both BTC and ETH  are digital assets, each running on its blockchain and in line with respective protocols. More so, Bitcoin is the first cryptocurrency, while Ethereum is the first Altcoin.

The inception of Ethereum within the crypto-verse sparkles a rally like no other. Currently, close to 5000 digital assets exist in line with the listing by Coingecko.com.

Comparing the Cryptocurrencies

Comparisons of cryptocurrencies are a great way to launch a discourse with a value proposition for each. It’s a relative debate, and significant consensus can be drawing from across the board.

No cryptocurrency is similar to any other. Those minute differences existing and reach contributes to the overall contrast. A case for a pair is quite simple to scheme through and capture deviations. While some cryptocurrencies may almost perfectly match up similarities to a great extent, their developers would most certainly be different at many levels either by accident or coincidence.

Ethereum vs Bitcoin: The Basics

Ethereum came into existence as of July 30, 2015  with the acronym symbol ETH. Bitcoins had come earlier- 3rd January 2009 with the acronym BTC.  Ethereum’s founder Vitalil Buterin’s faith that the Bitcoin blockchain required a scripting language, and finding no support launched the same with Ethereum.

Bitcoin has only one founder0 Satoshi Nakamoto, and Ethereum has an unusually long list, and Vitalik Buterin sits at its core.

At the elementary level, Bitcoin pursues the establishment of virtual currency that is decentralized- with no point of manipulation. Ehereum, on the other hand, pursues the formation of a platform for launching decentralized applications, and the most prominent is smart contracts.

Smallest unit if Bitcoin is a Satoshi, which is one Bitcoin split up to a million times.

On the other end, the Ethereum blockchain is powered by Ether as the rewards for miners.  1 Ether can be split into 1 Billion units, each known as  Gwei. Further, when 1 Gwei is split into a billion units, you get 1 Wei.

By being decentralized, both BTC and ETH  have no authorized issuer in a central bank’s capacity.

Blockchains are merely public ledgers and are accessible to any users who access the internet. BTC and ETH  both work on distributed ledgers’ principles, which both work with cryptography facilitating data encryption for both.

Main Differences for Bitcoin vs Ethereum

The difference between Bitcoin and Ethereum stems from the original purpose of each respective blockchain. Aside from being digital-assets, btc vs eth differ in several arrays ranging from user needs to protocols behind each.

Technical Differences

Ethereum blockchain is unique – an open-source platform for creating decentralized applications. Bitcoins blockchain protocol allows a maximum mining capability of 21 Million Bitcoins. Virtually, Ethereum, as a software platform, has infinite capabilities with the vastness of the applicable cases.

Technically, Ether platform algorithms run on ehash, Bitcoin algorithms run on SHA-256.

Ether transactions contain bits of executable codes, while those of Bitcoin only include notes. Ether transactions close within seconds while those of BTC takes minutes.

Decentralized

Both BTC and ETH are accessible on their  respective blockchains with no party with individual control at any point( Without majority consensus)

Smart Contracts

Smart contracting enables codes to control agreements based on underlying conditions- away from human interference. Bitcoin has no smart contracts; it’s an online medium of exchange – a currency rather.

On the other end, Ethereum’s primary purpose is a platform where coders can make agreements filed on the blockchain. Therefore, smart contracting is the main distinguishing factor between it and that of Bitcoin.

Ethereum vs Bitcoin: The Conclusions

Is Ethereum better than Bitcoin?

Bitcoin will facilitate you to pay for goods and services. Ethereum will enable you to develop smart contracts. In terms of capitation, BTC is far better than ETH.  From a neutral perspective, BTC and ETH are the most valuable digital assets concerning popularity and price.

Which has Better Technology between Bitcoin vs Ethereum?

Both BTC vs ETH have the best technologies for each. Each technology aligns with the primary purpose right from inception. Since bitcoin did not allow smart contracting- none of them is superior to the other.

Bitcoin has scalability problems- with transactions taking long to clear. Ether transactions clear very fast. Along time, other blockchains with scalability solutions like lightning network and side-chains have arisen so strongly to close the gap.

Final Conclusion – The Difference Between Bitcoin and Ethereum

Real differences exist between bitcoin and Ethereum. Right from the core purpose of blockchain applicability to use cases. Under the technical details underlying each, each uses a specific hashing algorithm to deploy its encryption mechanisms.

More fundamentally, bitcoin is more aligned to un-baking societies – creating a medium of exchange that’s publicly accessible to anyone globally as long as they have internet access. Ethereum, on the other hand, is a business driver software – facilitating agreements in the form of smart contracting –  with a vast landscape of usable and applicable cases with global appeal.

At some point,  relative notions from a holistic point of view between BTC and ETH. While bitcoin sorts trust issues with monetary transactions, Ethereum comes in to seal the loops with trust in contracting. Therefore, both seem to create a blend to form a trust plane never experienced within business circles.

Lastly, every digital asset has a unique value offering that subscribers hold dear, and that’s what makes the entire chain command stakeholder interests in ways beneficial across them.