Both BTC (Bitcoin) and ETH (Ether) are Crypto-currencies but what are the differences?
Bitcoin and Ether are similar in that both are crypto-currencies; both are decentralized; both can be traded and both can be stored; and both use Blockchain technology.
Those similarities fail to separate our understanding of their differences. So now let’s look at what makes each one unique.
First, let’s gain some understanding about Bitcoin (BTC):
Bitcoin (abbreviated BTC) was introduced in January of 2009 when Satoshi Nakamoto presented the Whitepaper with aspirations of becoming a decentralized digital payment system with no central banks involved. Bitcoin uses a photographically distributed public ledger on the Blockchain that anyone can call up and see. This eliminates any central controlling agency to secure our transactions.
Bitcoin has dominated the crypto-currency in popularity and value from the beginning and in 2017 accounted for 87% of the total Crypto-currency market.
But in time, other uses for Blockchain emerged. One such crypto-currency concept was Etherum.
Now, let’s learn how Etherum (ETH) is different.
Etherum was launched in July of 2015 and has become the largest and most well-developed, open-ended decentralized software development. Etherum was created with the development of decentralized “Smart Contracts” and other decentralized programs that eliminates fraud, downtime and control from any third party.
Etherum has many potential use cases, which are powered by it’s native token ETHER (abbreviated ETH) Ether powers a number of potential applications. In 2014 Etherum offered a presale of Ether (ETH) which had a very successful response. Think of Ether as the fuel for running the commands on the platform and is used by developers to build and run those programs.
Ether serves two main purposes: It is traded the same as any other digital currency, plus it is used to power and build applications on the network platform. It is said that people all over the world use ETH to pay bills, as a store of value and even as collateral.
According to Investopia, the KEY differences in BTC and ETH are these:
“While both the Bitcoin and Ethereum networks are powered by the principle of distributed ledgers and cryptography, the two differ technically in many ways. For example, transactions on the Ethereum network may contain executable code, while data affixed to Bitcoin network transactions are generally only for keeping notes. Other differences include block time (an ether transaction is confirmed in seconds compared to minutes for bitcoin) and the algorithms that they run on (Ethereum uses ethash while Bitcoin uses SHA-256).”
“More importantly, though, the Bitcoin and Ethereum networks are different with respect to their overall aims. While bitcoin was created as an alternative to national currencies and thus aspires to be a medium of exchange and a store of value, Ethereum was intended as a platform to facilitate immutable, programmatic contracts, and applications via its own currency.”
“BTC and ETH are both digital currencies, but the primary purpose of ether is not to establish itself as an alternative monetary system, but rather to facilitate and monetize the operation of the Ethereum smart contract and decentralized application (dapp) platform.”
“Ethereum is another use-case for a blockchain that supports the Bitcoin network, and theoretically should not really compete with Bitcoin. However, the popularity of ether has pushed it into competition with all cryptocurrencies, especially from the perspective of traders. For most of its history since the mid-2015 launch, ether has been close behind bitcoin on rankings of the top cryptocurrencies by market cap. That being said, it’s important to keep in mind that the ether ecosystem is much smaller than bitcoin’s: as of January 2020, ether’s market cap was just under $16 billion, while bitcoin’s is nearly 10 times that at more than $147 billion.”
These “differences” make owning each an awesome addition to any portfolio whether HOD-ling or using as payment or medium of exchange.