Among all the popular forms of cryptocurrencies Trading Strategy, Bitcoin holds the larger market cap by far, but Ethereum provides more lucrative custom contracts and the potential to be used in more commercial settings than just buying and selling.
What Is Bitcoin? A Brief Overview
Released by an online persona known only as Satoshi Nakamoto, Bitcoin came out in 2009 and has since then become the world’s most frequently traded currency. People trade it for goods and services, buy and sell it to make a quick profit, and even buy large amounts to hold till the coin’s value skyrockets.
What Is Ethereum? A Brief Overview
Created in 2015 by Vitalik Buterin, Ethereum is a cryptocurrency focused on practicality. Known as ether tokens, the Ethereum currency is often used to deploy decentralized applications based in a peer-to-peer network. It’s great to be used as payment for goods and services, as well as to create smart contracts.
6 Key Differences Between Ethereum and Bitcoin
1. Concepts: Ether’s The Practical Choice
Bitcoin
Bitcoin’s key benefit is enabling peer-to-peer transactions, making it a viable alternative to fiat currencies like the US Dollar. You also don’t need to pay high transaction fees when dealing with Bitcoin, and there’s no central authority to deal with.
Ethereum
Ethereum is also used to facilitate peer-to-peer transactions, but it can be used for far more than that. You can create a platform for smart contracts allowing users to exchange everything from real estate to NFTs.
2. Mining: Both Involve Significantly Complex Processes
Bitcoin
Bitcoin uses a concept known as “proof of work” to allow miners to receive their rewards. It involves solving a series of complex mathematical equations to create a new block of Bitcoin, and rewards the first one to get there with 6.25 Bitcoins. However, as the supply of Bitcoin shortens, this reward will slowly get reduced by half.
Ethereum
Ethereum also uses the “proof of work” method for mining, but is currently working on moving on to the “proof of stake” method, which is focused on verifying the next block of Ethereum based on the number of coins they currently hold.
3. Time: Ether Takes Marginally Less Time To Mine
Bitcoin
Mining a new block of Bitcoin takes about 10 to 12 minutes on average. The time usually depends on the equipment and software being used.
Ethereum
Ethereum takes only 10 – 15 seconds to create a new block, which means significantly less investment in power costs and other miscellaneous expenses.
4. Fees: It’s Complicated
Bitcoin
One of the best things about Bitcoin is that transaction fee are entirely optional when it comes to this crypto. You have the option of paying miners more to focus on your transaction, but it’s going to get mined sooner or later if you’re willing to wait.
Ethereum
On the other hand, you have to pay a compulsory transaction fee when trading ether tokens in ether itself. This fee is known as “gas”, and drives the computer power which lets your transaction be recorded on the Ethereum blockchain.
A Cryptocurrency Showdown: Bitcoin vs. Ethereum (Which Is Better?)
The answer is that it depends. With a community of millions worldwide, optional transaction fees, and easy availability everywhere, Bitcoin works better as a peer-to-peer transaction system. Getting started with Bitcoin is easy, and so is trading it on platforms to make a quick buck. Mining Bitcoin is fairly complicated but comes with a risk vs. reward system that holds great rewards for the miner willing to learn and invest.
Ethereum, on the other hand, is better when it comes to practical uses like smart contracts, which can enable a different kind of transaction entirely. Dealing with Ethereum needs a better knowledge base of how crypto works, but if you’ve got what it takes, it doesn’t need the huge investments that its twin, Bitcoin, does. So, in the end, it’s up to you which one you choose.
Conclusion
If you’re thinking of learning more about cryptocurrency, a great place to get started is by trading small amounts so you can get a taste of crypto. It’s ideal to use trustworthy, reliable trading platforms like Bitcoin Profit. Check out the official website today to get started with your crypto trading adventure.