Cryptocurrencies didn’t even exist a decade ago, and now here we are wondering which of them would win in a Bitcoin vs Ethereum showdown. Here’s how they’re similar, and how they’re different.
Everybody knows what Bitcoin is—the very first cryptocurrency, the one that started it all, but nobody has a clue who Satoshi Nakamoto might be. It could be one person, or it might be a whole collective, but whoever was behind the first blockchain-based decentralized currency in the world is a genius.
Bitcoin isn’t a fiat currency which means that it’s not backed by any government, but nowadays governments and regulators have started to recognize it all the same. Other things to know about it: transaction fees are low, and as a virtual currency, Bitcoin’s built on public-key cryptography. Public keys are known and are essential for identification. Private keys are secret and are used for encryption and authentication
Despite starting out as an unrecognized payment method, Bitcoin has gone from a standing start in 2009 through years of scrutiny and controversy to achieve a position of growing respect and interest within the financial system. It’s also been a regular fixture in global news each time its price has soared to new highs.
Ethereum is kind of like Bitcoin but also kind of not. First off, it’s an open-source, distributed computing platform and operating system. It’s also based on blockchain but unlike Bitcoin has smart contract functionality built-in, and the actual cryptocurrency associated with it is called Ether. It was introduced in 2015 and has gained an awful lot of ground since then, rising to similar levels of prominence as Bitcoin, which is why the Bitcoin v Ethereum question is irrelevant.
If you’re asking about Bitcoin v Ethereum, they’re both built on blockchain technology, but they are also technically different. For instance, Ethereum uses a complete programming language called Solidity, but Bitcoin is mostly written in C++ and Java.
Average block times are also different. Ethereum’s is just a few seconds while Bitcoin’s can stretch to 10 minutes. Also, Bitcoin uses the SHA-256 algorithm while Ethereum’s is Ethash.
It’s fair to say that Bitcoin v Ethereum is also a question of purpose. Bitcoin was designed as a digital substitute for fiat currencies, able to be used for payment online and as somewhere to store value. Whereas Ethereum was created to hold value but also enable peer-to-peer contracts. Ether and Bitcoin are both digital money, but Ethereum doesn’t just facilitate decentralized currency, it enables decentralized and monetized coding too, so developers can use it to create new kinds of applications.