There’s no secret, that BTC and ETH are the crypto leaders in terms of price, value, and cap. No doubts, ETH and BTC are the best investment options ever, being the most established and adopted coins in the world. Today, the ETH to USDT pair is traded at $1,810, as for BTC, it costs $26,832 (May 2023). Now we would like to describe the difference between Bitcoin and Ethereum.
Ethereum vs bitcoin: Crucial distinction
ETH and BTC, both being digital assets, exhibit contrasting characteristics in several significant aspects:
- Bitcoin is a type of online currency that people use to trade with each other without going through a central authority. On the other hand, Ethereum allows the development of apps that can work without a central authority.
- The Bitcoin blockchain aims at keeping a decentralized record of BTC operations, documenting the transfer of Bitcoins between individual addresses. In comparison, Ethereum not only logs operations but also enables the work of intelligent contracts. They run automatically, with their terms outlined.
- Ethereum’s design allows programmers to develop and implement contracts and dApps on its network. It makes it versatile and provides diverse use cases such as DeFi, decentralized exchanges, and NFTs. On the other hand, Bitcoin has a less flexible scripting language that primarily supports basic transaction functions.
- Currently, Bitcoin and Ethereum use varied ways of making decisions. Bitcoin uses Proof-of-work (PoW), where miners compete to solve complicated math problems to approve operations and add blocks to the chain. Meanwhile, Ethereum, which previously relied on PoW, is moving towards a Proof-of-Stake (PoS) method called Ethereum 2.0. PoS involves validators who stake their coins to protect the network and add new blocks.
- Bitcoin has a set limit of 21 million coins that will be created through a halving schedule, gradually decreasing the rate of new coins being produced. In contrast, Ethereum does not have a limit on coins issued.
- Ethereum has experienced significant growth in dApps development, DeFi projects, and different token creation. On the other hand, Bitcoin holds a more established and recognized position and is often taken as “digital gold.”
BTC and ETH differ in their purpose, functionality, programmability, consensus mechanisms, supply, and development communities. These differences result in their distinct use cases and applications in the broader field of blockchain. If you are a beginner investor or trader and need information and skills, welcome to the WhiteBIT blog where you will find the guide to trading cryptocurrency.