Cryptocurrencies: what is the difference between Bitcoin and Ethereum? –

In what is the vast landscape of cryptocurrencies there are certainly two that stand out in particular for fame and above all for market capitalization, one is i Bitcoin the other is Ethereum.

Yet, if everyone knows these two digital currencies, notoriety often leads people to wonder: what is the difference between Bitcoin and Ethereum? Are they two identical cryptocurrencies? Do they just have different developers?

Here we will try to answer these questions, that is, to draw the line of diversity between BTC And ETH.

The parameters for classifying and comparing the cryptocurrencies there are many, some of which concern market capitalization, that is, the total amount of money invested; the so-called “Unique addresses”, that is, to explain it in the simplest way possible, the digital wallets connected to the network of a given cryptocurrency; the trading volume in the cryptocurrency itself.

Recalling, as a general premise that under the generic name of “cryptocurrencies”, there is a tendency to group a whole that is not only vast, but also variegated and made up of categories and subcategories, where for a series of factors, including the technological infrastructure, none digital currency is really the same as the other.

Bitcoin (BTC) and Ethereum (ETH): a comparison between the two cryptocurrencies

Back to Bitcoin and Ethereum Cointelegraph provides a simple and clear definition of it, stating that between the two cryptocurrencies there is first of all a substantial difference and that is: if BTC, the first digital currency in the world, now as an asset resembles only gold and is in fact defined digital goldthe Ethereum network is somewhat reminiscent of a decentralized computer operating globally.

Contributing to this definition are the properties of the two cryptocurrencies where i Bitcoin they are limited in number (21 million tokens), just like precious metals which have a definite amount in nature and how these can be fractionated. These characteristics make BTCs suitable for long-term investments, assuming that the value does not decrease over time, because demand increases, but at the same time supply decreases.

Ethereum it is mainly a network that has its virtual token the ETH, in an unlimited number, and which is instead used to carry out decentralized applications all over the world, that is, not subject to a central authority.

However, the two cryptocurrencies also have contact points first of all they both operate on a Blockchain. Still using the simplest possible words one Blockchain is a public digital archive on which digital wallets can be linked and registered and through which cryptocurrencies are exchanged. Bitcoin and Ethereum in fact share the fact that they are decentralized cryptocurrencies, that is, unregulated makes a central authority, which can be the central bank of a particular nation for fiat currencies, like euro or dollar or like cryptocurrencies issued by these same bodies.

The differences between Bitcoin and Ethereum are also illustrated in the YouTube video edited by CNBC International TV:

Let’s go into the details of Bitcoins: what is a BTC? How are Bitcoins equal to gold?

After having drawn the lines by sums differences and similarities in general between BTC and ETH, let’s see the characteristics of the two cryptocurrencies in more detail by analyzing them separately.

Let’s start with Bitcoin, which are the oldest cryptocurrency ever, where transactions take place according to a system peer-to-peer (P2P), decentralized which does not require a central authority.

That is, i Bitcoin they are the ones who for the first time offered to the world the possibility of managing money without the exchanges being regulated by one central bank.

Bitcoins are created with a process called mining and only 21 million tokens can be mined, which is why they are said to be like precious metals: because they are, like gold and silver, a limited commodity in nature in terms of quantity, which helps to preserve their value in time.

Again, an important aspect is that the Blockchains of the two cryptocurrencies use different protocols: where Bitcoin uses the protocol proof-of-work (PoW), Ethereum is switching to proof-of-stake (PoS).

What are the unique features of the Ethereum Blockchain and the ETH cryptocurrency

Ethereum it’s like i Bitcoin a decentralized cryptocurrency that operates on a Blockchain, only in this sense it is more than Bitcoin, because they use the Blockchain only for monetary transactions, while the former transforms the Blockchain itself into a decentralized computer available to everyone around the world.

Ethereum is not just a cryptocurrency, but an entire open source Blockchain network, which hosts a series of applications always accessible via the native currency, i.e. ETH.

Furthermore, if the creator of the BTC, Satoshi Nakamoto, is actually a legendary creature that nobody knows anything about, the developers of the Ethereum network are all well known to the public.

To better understand Bitcoins they use the Blockchain only for BTC transactions, while the Ethereum network supports different types of financial applications such as NFT (Non Fungible Token).

Finally, Ethereum is currently making a major transaction with the switch from the proof-of-work (PoW) protocol to the proof-of-stake (PoS) protocol. The latter requires fewer steps and in addition to the higher speed in transactions, since it performs many more per minute than the PoW, it consumes less energy so in this sense Ethereum is taking a faster path towards environmental sustainability than Bitcoin.

Another very important aspect is that Ethereum has no token limit which can be put into circulation, unlike Bitcoins which are 21 million, and this makes them completely different from a store of value such as gold or BTC, because they are limited instead.

Bitcoin and Ethereum: the main differences between the two cryptocurrencies

Next to these similarities between Bitcoin and Ethereum however, there are substantial differences which reside in the very nature that makes them two competing currencies on the one hand, but on the other hand makes them two complementary projects because in fact they now perform different tasks.

In detail, by the value and their nature Bitcoins are now, even according to the main investors such as Saylor and Muska store of value like gold in which to keep long-term investments.

The cryptocurrency ETH instead it is unlimited and the Blockchain is used for the use of the most varied applications that operate on it, think of the NFT.

Put simply, if i BTC being limited in number, they respond to the same market laws as precious metals, that is, they preserve and increase their value over time precisely because they exist in a finite quantity. Otherwise, the potential of Ethereum on which the market capital depends and the price per unit are linked to the technological infrastructure.

In both cases they are cryptocurrencies which by now, for different reasons, have reached a considerable market capitalization and also a considerable price per unit.

The token value registered on February 14, 2022 is: 1 BTC = 37,289.38 euros, while 1 ETH = 2,548.88 euros.

In the crypto world there are anyway altcoins other than Bitcoin and Ethereum, which have a much lower price per unit, but a great potential and therefore are more suitable for those who want to invest only a small capital, hoping for an explosion.

Editorial collaborator, born in 1984.

I have a degree in Classical Philology and I have a doctorate in Ancient History, at theUniversity of Naples Federico II, with a thesis on the fragmentary work of Asclepiade di Tragilo. I am the author of scientific publications on the classical world and co-editor of two international academic volumes. Since 2015, I’ve moved to England where I’ve worked as a freelance copywriter and casino dealer.

My motto is? “Naples is the flower of paradise. The last adventure of my life”.

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About the Author: Kate