Bitcoin & Ethereum: What’s The Difference?
by Yuliya Roccovich
Bitcoin and Ethereum are both decentralized digital currencies, but they have some key differences.
Bitcoin is the first and most well-known cryptocurrency, and it was created in 2009 by an unknown individual or group of individuals using the pseudonym Satoshi Nakamoto. The main purpose of Bitcoin is to serve as a decentralized, digital alternative to traditional fiat currencies, with a focus on providing a secure and transparent way to store and transfer value.
Ethereum, on the other hand, was launched in 2015 by Vitalik Buterin and a team of developers. While it also aims to serve as a digital currency, Ethereum’s main focus is on creating a decentralized platform for building and running smart contracts and decentralized applications (dApps). This means that Ethereum allows developers to build and deploy their own decentralized applications on the Ethereum blockchain, which can be used for a wide range of purposes, including finance, gaming, and more.
The Key Differences
One of the main differences between Bitcoin and Ethereum is in their consensus mechanism. Bitcoin uses a proof-of-work (POW) consensus mechanism, which is based on miners solving complex mathematical equations to validate transactions and create new blocks on the blockchain. This process consumes a lot of energy, but it is considered to be very secure and decentralized.
Ethereum, on the other hand, works on a proof-of-stake (POS) consensus mechanism. A POS consensus mechanism is based on validators, who are chosen to create new blocks on the blockchain based on the amount of cryptocurrency they hold and are willing to “stake” as collateral. This process is considered to be more energy-efficient than POW, as it does not require miners to solve complex equations and it reduces the risk of centralization.
Another important difference between Bitcoin and Ethereum is in their block time. Bitcoin’s block time is 10 minutes, which means that a new block is added to the blockchain every 10 minutes. Ethereum’s block time is 15 seconds, which means that transactions are processed much faster on the Ethereum network.
Finally, the maximum supply of Bitcoin is capped at 21 million coins, while Ethereum has no fixed maximum supply. Ethereum’s monetary policy is based on a “difficulty bomb” algorithm, which gradually increases the difficulty of mining new blocks, making it harder to produce new coins over time.
Conclusion
In conclusion, Bitcoin and Ethereum are both decentralized digital currencies, but they have some important differences. Bitcoin is primarily focused on serving as a digital alternative to traditional fiat currencies, while Ethereum is focused on creating a decentralized platform for building and running smart contracts and decentralized applications. Additionally, Bitcoin uses a proof-of-work consensus mechanism and has a block time of 10 minutes while Ethereum uses a proof-of-stake consensus mechanism and has a block time of 15 seconds, also Ethereum has no fixed maximum supply.
Where To Buy BTC & ETH?
As top cryptocurrencies, BTC & ETH can be bought on a variety of exchanges like DIFX, to easily buy them you just require a debit/credit card.