Novice investors are often intrigued by the competition between these two largest cryptocurrencies. It may look like a fight between Microsoft and Apple but it isn’t, surely. The key is that BTC and ETH are completely different, they make for different purposes and develop the world of crypto in different ways. There’s no ultimate answer about investing. It all depends on your attitude and purposes. We can only provide you with detailed info.
Note that nobody can read the future of any particular cryptocurrency due to various factors which affect the market and the technology itself. The following information and comparisons are based on the inherent features of the two crypto coins as well as on their history. So, it’s only up to you to decide whether you should buy Ethereum or Bitcoin.
Bitcoin or Ethereum: differences
We’ve divided differences into four major subcategories to contrast BTC to ETH. The statistics are highlighted at the end of this article.
Type of coin
Bitcoin is the original cryptocurrency, pioneering other coins. Similarly to numerous clones like Bitcoin Cash or Litecoin, BTC aims at replacing fiat money and assets like gold. Practically, Bitcoin investors don’t have to deal with banks at all as they use the global currency on their own. As a side feature, this coin was designed to facilitate cross-border transactions and money transfers.
Ethereum is not a token itself but a decentralized application platform. It offers smart contracts – protocols which neither go offline nor are influenced by the third party. A smart contract provides for fulfilling a specific statement or finalizing a transaction automatically when it meets the declared conditions. It works similar to the principle of “If-Then”. Ether is more of a fuel for the network than a regular cryptocurrency.
In one sentence: Bitcoin is digital money, Ethereum is power for decentralized apps.
Bitcoin works in a similar way to common money transfers. Anybody can send any amount of BTC to another wallet. It’s a simple, smooth, and quite stable technology. However, transactions within the Bitcoin network may take minutes, which is really slow. Even more, transaction fees are higher than those of other cryptocurrencies and average $1. In peak times they ran to the absurd highs of around $28!
Ethereum utilizes its smart contracts feature. Transactions are automatic, and money transfer can be made only if several conditions are met. For instance, while sending 10 ETH you can impose a condition that your balance must be at least 10 ETH and specify the date. Once a smart contract is created, it can’t be changed. Transactions also take only seconds and cost less than $1.
In one sentence: Bitcoin’s transactions are manual and relatively slow, Ethereum is automatic and fast.
Bitcoin is programmed with a stack-based language and uses the SHA-256 algorithm. It seems that this approach is a bit outdated, which results in slower transactions. However, Bitcoin is planning to evolve and switch to Lightning Network with significantly higher speeds and lower fees.
Ethereum is Turing-complete and uses the Ethash algorithm. It allows users to create their own distributed applications using ETH coins. It also increases speed. Ethash and the main idea of smart contracts are pretty modern, so a lot of other cryptocurrency platforms utilize them.
In one sentence: Bitcoin is stable but old-fashioned, Ethereum is diverse but not so reliable.
Bitcoin is an alternative to regular money and a store of value, that’s all. It can be exchanged and sometimes you can buy goods or services with it. High price limits the usage of BTC. Let’s say, you can’t buy a cup of coffee with it but you can send a lot of money – thousands, millions of USD in BTC – to any Bitcoin wallet.
Ethereum also offers a cryptocurrency but generally, it is more than that. ETH coins are used to keep the Ethereum platform running and awarded to the users who create apps for various purposes. Smart contracts facilitate deals. The killer feature of Ethereum is that anybody can create any contract and then introduce it to the world.
In one sentence: Bitcoin’s major task is to become a global currency, Ethereum’s major task is to become the world supercomputer.
Bitcoin or Ethereum: The Bottom Line
Due to totally different purposes and the technology used, both cryptocurrencies can survive. However, only one of them will be the number one on the market, or it may be another form of alternative money, who knows. The main idea is that Bitcoin is designed for financial transactions and peer-to-peer deals without the need for intermediaries. Ethereum was invented for creating apps based on smart contractswith significant convenience.
Which currency is better to buy? You can answer. Choose BTC if you don’t want to risk a lot and believe it is the future of money. Take ETH if you like the idea of innovative software and universal usage of cryptocurrencies.
Bitcoin or Ethereum: Stats
All indexes are valid for 31 May, 2018.
|Market capitalization||$128.8 billion||$57.1 billion|
|Price per coin||$7,549.59||$572.77|
|Maximum registered price||$20,035||$1,432|