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Difference Between Bitcoin and Ethereum

Difference Between Bitcoin and Ethereum

Admin | 24 Aug 2023 | 0 Comments

Bitcoin and Ethereum are among the top-traded cryptocurrencies in the crypto market. Both these cryptocurrencies work on blockchain technology and have many differences between them. Bitcoin is the largest cryptocurrency in terms of market capitalization while Ethereum is the 2nd largest cryptocurrency.

Both these cryptocurrencies are traded through online exchanges and stored in different kinds of cryptocurrency wallets. In this blog, we will discuss between difference between Bitcoin and Ethereum by considering the various factors.

What is Bitcoin (BTC)?

Bitcoin is a cryptocurrency discovered in the year 2009 by Satoshi Nakamoto. There is no central authority in Bitcoin. This cryptocurrency is not physical and is found only in the secured public ledger. The two main components of Bitcoin are digital currency and technology. Around 100,000 merchants and vendors use Bitcoin as a medium of payment.

This cryptocurrency became successful immediately after its launch. It soon became the predecessor to all the cryptocurrencies launched in the past few years. Bitcoin is a kind of decentralized digital currency that can be used without any middle agents or intermediaries.

In the Bitcoin system, the transactions are verified by network nodes with the help of cryptocurrency and then recorded in a public ledger. The total amount of Bitcoin is only 21 million. Moreover, you can convert Bitcoin into various other kinds of cryptocurrencies and goods.

What is Ethereum (ETH)?

Ethereum is the second largest cryptocurrency in terms of market capitalization. It is a type of decentralized cryptocurrency that runs with the help of smart contracts and crypto contracts. There is no interference from any third-party or middle agent in the Ethereum platform.

This cryptocurrency was launched in the year 2015 and it is currently 2nd largest cryptocurrency in terms of market capitalization. Many decentralized applications or DApps are developed with the help of Ethereum cryptocurrency.

The blockchain of Ethereum is a public and decentralized ledger. Many developers can develop applications on top of the Ethereum blockchain. The native currency of Ethereum is known as Ether. You can use Ether to pay for gas or transaction fees.

Difference Between Bitcoin and Ethereum

Both Bitcoin and Ethereum have many differences in terms of market capitalization, consensus mechanism, and hash rate. Here is the list of differences between Bitcoin and Ethereum that you must know:

  • Market capitalization

    In terms of market capitalization, both Bitcoin and Ethereum are the largest cryptocurrencies. The market capitalization of Bitcoin is more than that of Ethereum. The market capitalization of Bitcoin at present is around $570.68 billion while Ethereum has a market capitalization of around $221.35 billion.

  • Rate of energy consumption

    The second factor to look for in both cryptocurrencies is the energy consumption rate. The rate of energy consumption in the Bitcoin network is around 3.2 million households. On the other hand, the rate of energy consumption in the Ethereum mining system is around 1.2 million households.

  • Smart contracts

    Bitcoin has some contracts but is not as complete and flexible as the Ethereum network. These smart contracts in Bitcoin do not have functionality just as the programming language gives them. The smart contracts in Bitcoin are written in various programming languages such as Clarity and Script.

    Ethereum helps to create smart contracts which are codes of computers stored on a blockchain. These nodes are executed when specific terms and conditions are fulfilled. The smart contracts of Ethereum are written in programming languages such as Vyper and Solidity.

  • Time to add a block

    Both Bitcoin and Ethereum include a proof-of-work algorithm to add new blocks to the blockchain. A Bitcoin miner will require an SHA-256 hash that is similar to a target hash. Even an Ethereum miner will require a hash that is similar to the target hash.

    In the case of Bitcoin Mining hardware, the average time required to find a new block is about 10 minutes. On the other hand, the average time required in the case of Ethereum mining hardware is 12 seconds to add a new block.

  • Transaction fees

    In the case of Ethereum, the transaction fees depend on the gas price. This price is a measure of the computational resources needed to complete a transaction. In the case of the Bitcoin mining system, the coin has a static transaction fee irrespective of the amount of information sent.

  • Hash rate

    Hashing algorithms in both Bitcoin and Ethereum are different. Hash rates in both cryptocurrencies cannot be compared. Normally, the hash rate in Ethereum is higher than in Bitcoin. In other words, Ethereum is a safer option than Bitcoin. Ethereum is secure against the majority of attacks.

  • Volatility of Price

    Both Bitcoin and Ethereum are volatile. Bitcoin is partly volatile and includes a lot of uncertainty. Contrary to that, Ethereum is a stable asset but has some volatility. It is a type of platform to launch new Initial Coin Offerings or ICOs. These offerings are often speculative and leave a deep impact on Ethereum's price.

  • Block limit

    A block limit in Bitcoin blockchain is 1 MB. On the other hand, there is no block limit in the Ethereum blockchain.

  • Rewards

    Bitcoin miners will receive 6.25 BTC by adding a new block in the network. On the other hand, the Ethereum miner will receive around 5 BTC with some extra rewards by adding a new block in the Ethereum network.

Final words

Bitcoin is a more popular cryptocurrency than Ethereum as of now. But many people choose Ethereum these days because of high profits. In terms of market cap, Bitcoin is more valuable than Ethereum.

You can easily get an affordable Bitcoin Mining machine with a high hash rate and low power consumption rate. The transaction fees in Ethereum are lower than Bitcoin. Apart from that, you can also create decentralized applications with the help of Ethereum.

You can choose any cryptocurrency between Bitcoin and Ethereum to start mining. Pick the best Cryptocurrency mining machine to start mining any cryptocurrency. If you want to start mining Bitcoin or Ethereum, choose the premium quality Crypto mining software.

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