More

    Bitcoin vs. Ethereum: Guide to Two Popular Cryptocurrencies

    Investing in a new asset such as cryptocurrency can be thrilling. After all, in September 2021, the price of a single bitcoin surpassed $67,000. Although the price has now decreased to around $38,823 as of May 2, 2022, the prospect of making money by keeping cryptocurrencies may still be appealing.

    Cryptocurrencies are part of blockchain networks. The bitcoin network and the Ethereum network are the two most popular blockchains. Bitcoin (BTC) and ether (ETH), the two most popular cryptocurrencies, are their currencies.

    While these two networks and their popular cryptocurrencies are comparable in certain respects, they serve different goals. If you’re thinking about buying or trading one of these digital currencies, knowing their similarities and distinctions is crucial.

    Bitcoin vs. Ethereum

    The cryptocurrency that powers a blockchain network. The native coin of a blockchain is used as a medium of trade between its users. It’s also frequently used to pay transaction fees on the blockchain network.

    The Bitcoin blockchain’s native coin is bitcoin, while the Ethereum blockchain’s native coin is ether. Both blockchains have some utility in the crypto world, and their currencies may present prospects for investment.

    About Bitcoin

    The first cryptocurrency was Bitcoin. It was first proposed in a whitepaper disseminated anonymously under the name Satoshi Nakamoto, who isn’t a real person.

    Satoshi created the money based on ideas proposed to the cypherpunks email list by computer scientist Wei Dai in 1998. Mathematician Stuart Haber and physicist Scott Stornetta first proposed these ideas in a publication. To prove ownership, the study envisioned a blockchain-like architecture.

    The identity of the Bitcoin whitepaper’s original author(s) is unknown to this day. The digital code that underpins bitcoin, on the other hand, is in the hands of Gavin Andresen, who, along with others, develops bitcoin at the Bitcoin Foundation. There is no single “owner” because the programming is open-source and decentralized.

    About Ethereum

    A bitcoin enthusiast and co-founder of its magazine website, Vitalik Buterin, was the main author of a whitepaper explaining the Ethereum blockchain in 2013.

    Buterin and his co-founders released the ether initial coin offering in 2014, and the Ethereum blockchain was officially launched in 2015. The Ethereum platform has received multiple modifications since then.

    Bitcoin vs Ethereum – Protocol

    To verify transactions, they developed the concept of proof-of-work (PoW). Some people use computational power to solve cryptographic puzzles in this way. As compensation for giving their computer capacity to the system, users that successfully verify transactions receive bitcoin. “Miners” is the term for these validators.

    Because of its massive decentralized consensus requirement (TPS), it can only process roughly five transactions per second. Compare this to the capabilities of Ethereum to process over 10 TPS and the Visa payment network to process over 1,700 TPS.

    After converting to the Ethereum 2.0 chain, Ethereum intends to be able to raise its network speed to a theoretical 100,000 TPS. The switch to a proof-of-stake (PoS) mechanism is part of this upgrade. However, some estimates suggest that it will be closer to 3,000 TPS. Transactions are verified by nodes in a PoS consensus method. Because the chosen nodes have an ether stake, verification is based on coin ownership rather than compute capacity.

    Stay in the Loop

    Get the daily email from CryptoNews that makes reading the news actually enjoyable. Join our mailing list to stay in the loop to stay informed, for free.

    Latest stories

    You might also like...