Without question, the two most famous cryptocurrencies around today are Bitcoin and Ethereum. Bitcoin was established by the mysterious Satoshi Nakamoto first in 2009, while Ethereum emerged around four years later thanks to Vitalik Buterin. Bitcoin is by far the most valuable and anyone with a large number of these coins in their Luno bitcoin wallet can definitely call themselves a well-off individual.
However, these two well-known cryptocurrencies are not argued over because of their value, but in other ways. Despite being the most famous cryptocurrencies in circulation, they do have quite different concepts and purposes – as well as many similarities. Here, we will put them up against each other, so you know more about their differences.
Differences in Conceptual Design
Although both digital currencies may be defined as just that – a type of crypto – they do have very different conceptual designs. Bitcoin was made as an alternative to traditional financial structures, a decentralised, anonymous and more secure way of sending and receiving money. Mention the word bitcoin and the first thing that will spring to most people’s minds is a currency.
Yet, the concept of Ethereum is not the same. Ethereum is also decentralised which it has to be to fit in with the crypto crowd, but it’s not exactly a currency – although it is. Confused yet? Unlike Bitcoin, Ethereum is more of a decentralised computer on the world stage. It is a mass-use platform where decentralised apps and smart contracts can be used.
A Difference in Purpose
With different concepts to each of these cryptos, it’s only fitting that they will then have different purposes, which they do. The overarching purpose of Bitcoin is to simplify and make cheaper peer-to-peer transactions, whether that transaction is to your friend across the road or a relative on the other side of the planet. No matter where you send your crypto, the fees remain constant and stable. It is an alternative to fiat currencies.
On the other hand, Ethereum has a different purpose altogether. The platform it runs has been made to aid peer-to-peer transfers and does overlap with Bitcoin’s purpose to an extent, but the bigger picture shows that the purposes differ significantly. The main focus of the platform is to monetise and facilitate Ethereum with the aim of helping developers to run and build distributed applications, also known as dApps.
Bitcoin Vs. Ethereum: Supply
One of the fundamental differences between Bitcoin and Ethereum is seen in their supply. On the one hand, Bitcoin is limited to a supply of 21,000,000 coins. Naturally, this creates a demand and a need to supply which is healthy for Bitcoin. Ethereum is, however, a bit different. This crypto does not have a ceiling supply and its production is ongoing.
Bitcoin and Ethereum may the two most recognised cryptocurrencies in the world and at a constant fight for the top place on the podium, yet, when you put them under the microscope you begin to realise that they are not so similar. Thus making each a winner in their own right.