Bitcoin and Ethereum are the two biggest players in the cryptocurrency world. Together, they currently make up 63.7% of the cryptocurrency market. Many experts believe that one day Ethereum will flip Bitcoin and take the top spot.
But what makes these two cryptocurrencies different? In this article, we’ll take a look at 5 key differences between the two biggest cryptocurrency companies.
The Differences Between The 2 Biggest Cryptocurrency Companies
Bitcoin was the first cryptocurrency and came into existence in January 2009. Ethereum didn’t appear until just over six years later, in July 2015. Ethereum began trading at $2.77 a coin, by which time Bitcoin had already grown from $0 to over $300.
At the time of writing, Bitcoin is trading just over $32,000 and Ethereum around $2,000. They’ve both come a long way since inception, but here’s what makes them different.
1. Different Purposes
Bitcoin was designed to be a digital alternative to fiat currency. Bitcoin is primarily a store of value, which consumers can buy with their fiat currency. Ethereum is also a digital currency, but there are some key differences.
As well as being traded on digital exchanges just like bitcoin, Ethereum is also used on its network to run applications. This means that developers can build on the Ethereum network.
2. Block Time
Block time refers to the amount of time it takes to create the next block on the chain. Bitcoin’s block time is around 10 minutes. It is thought that this block time was decided upon when Bitcoin was initially launched to help guarantee security on the network. In vast comparison, Ethereum has a blockchain time of between 10-19 seconds.
3. POW vs POS
Ethereum and Bitcoin are both use the proof of work (POW) model at the moment. However, the new London hard fork upgrade for Ethereum will mean that becomes proof of stake (POS).
POW uses much more energy, which is why there has been so much debate around the energy consumption with mining Bitcoin. Some researchers believe that POS uses 99.9% less energy than the proof of work system.
4. Stability
There is always going to be volatility in the cryptocurrency world, but Bitcoin is considered the most stable crypto due to its market size. Remember that Bitcoin’s market cap is approximately 3 times larger than Ethereum.
This means that people using cryptocurrency as a long-term store of value are more likely to choose bitcoin. It might not appreciate as much, but it is also likely to hold its price better than Ethereum, and other coins, during corrections.
5. Affordability
When it comes to Ethereum vs Bitcoin, one of the biggest differences for many investors is the price. For the amount of money it would cost you to buy a single Bitcoin today, you could purchase 16 Ethereum and still have some change.
Many new investors like to hold entire coins, and ideally multiples of them. Ethereum offers investors a better chance of being able to purchase entire coins.
Which Digital Currency Will Go Further?
Of the two cryptocurrency companies, it’s difficult to predict which would be the better buy right now. Ethereum has some very exciting news ahead of it, but Bitcoin has been battle-tested for an additional 6 years. Both are considered two of the safest cryptocurrency investments in the crypto space.
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