Is Bitcoin or Ethereum winning the cryptocurrency opposition?
Bitcoin and Ethereum are by far the most advanced and demanded cryptocurrencies. They are of interest to financiers, businessmen, and ordinary people who argue about which coin is cooler – Ethereum or Bitcoin. Everyone has their own answer, and we will try to objectively figure out what is the difference between Ethereum and Bitcoin.
What are the features of Bitcoin?
The digital currency Bitcoin was introduced to the general public back in 2009. It has become an alternative to traditional currencies such as the euro, dollar, or yuan. In fact, Bitcoin was the same money, only existing exclusively in electronic form, not subject to government influence and maintaining the anonymity of its owner.
Such a cryptocurrency is needed by any individual or legal entity who wants to buy or sell any services or goods using it. At the same time, subject to the safety rules, no one will be able to block his account, trace the origin of money and transactions with them. In addition, coins are stored in special electronic wallets and do not interact with the banking system.
This is what makes Bitcoin stand out among more than 9000 cryptocurrencies:
1. This is the very first, most expensive, and most talked-about currency in the world. On the change in its quotes, people made fortunes for themselves. Therefore, today many large investors and businessmen have invested in this crypto. To a certain extent, this approach can keep it from collapsing, even in difficult times.
2. It is convenient to work with Bitcoin since almost all cryptocurrency exchanges and trading platforms support it. It continues to be the main competitor to traditional currencies.
3. There is already a wide chain of BTC-ATMs in the world, the coin is being introduced into payment systems and is gradually entering real life. Many offline services, shops, and restaurants sell goods and services for Bitcoins.
4. Protection against inflation. Bitcoin developers have established a cryptocurrency issuance principle that is resistant to depreciation. In total, it is planned to issue 21 million coins, that is, the issue will end quickly enough, and a popular product, the supply of which is limited, usually grows in price.
If we consider what Ethereum is, then here we will see a completely different picture. This platform was launched in 2014 and its main purpose, unlike Bitcoin, was not just to provide another means of payment, but to give users a new unique offer. This proposal is a blockchain-based multifunctional platform that includes additional features:
1. The possibility of concluding smart contracts between the parties based on decentralized applications available on the platform. Thanks to these applications, the blockchain can automatically check the fulfillment of the terms of transactions by the parties and execute them, excluding the human factor.
2. To conclude smart contracts, the user can use the internal currency Ether or create his token using open source code. I must say that it is also possible to create a smart contract on the Bitcoin network, but this is much more difficult due to the complex programming language and the tools offered.
3. An EVM (virtual machine) operates on the Ethereum network, which, given sufficient time and memory, can run an application created using any existing programming language. Thanks to EVM, there is no need for each application to create its own blockchain since thousands of them can simultaneously work on one platform.
4. Many startups and ICOs are being created on the ETH platform. Their developers simply use the system as a working tool, besides, when launching an ICO with Ethereum, there is no need to use the Kickstarter service, which takes 10% of the collected funds for its services. This approach attracts a large number of clients, but at the same time carries serious reputational risks, since a significant number of these ICOs are scams and are created by fraudsters.
5. This system was created later than BTC, and its developers took into account all the shortcomings of the first digital currency as much as possible, so as not to repeat them in their brainchild.
6. Speed of the network. It takes 10 minutes to generate a block on the Bitcoin network, while Ethereum takes about 15 seconds. Consequently, all transactions on this network are carried out and confirmed faster, and the miner can receive more coins in reward.
7. The Bitcoin mining remuneration is halved every 4 years, while for Ethereum it remains at the same level. This minimizes the risk that the purchased equipment will not pay for itself, and therefore attracts people to altcoin mining who do not have great computing capabilities.
8. The MetaMask application makes it possible to enter the blockchain directly through the Chrome browser, and the Ghost protocol makes it possible to generate income from the blocks that have already been mined.
The main similarities between the two competing digital coins
Bitcoin and Ethereum are now the most expensive cryptocurrencies according to leading analytical sites. If we talk about similar features, then we can dwell only on the most general fundamental points, otherwise, Ethereum and Bitcoin are very different.
Both cryptocurrencies can be used as a means of payment for goods or services, as well as transferred from sender to recipient, to some extent replacing the standard banking system. Also, these digital coins can be bought and sold.
Both Bitcoin and Ethereum are based on blockchain technology, in which all blocks with transactions are inextricably linked together into a single chain. They allow you to operate your tokens without revealing the identity of the parties and maintain the anonymity of users.
Both coins have a decentralized transaction confirmation mechanism, they do not depend on the failure of one or several nodes, and are not regulated by any government regulatory authorities.
BTC and ETH have a Proof-Of-Work mining algorithm that requires miners to perform complex math calculations on their hardware. Although Ethereum has now begun the process of a gradual transition to the Proof-Of-Stakes protocol, that is, confirmation of ownership, however, when the system will completely switch to PoS is still unknown.
Given the moment that the rate of digital coins completely depends on the ratio of supply and demand, both cryptocurrencies are highly volatile, just like all other cryptos. Their course can change at times in a few weeks or even days. But that’s where the similarities end and the differences between systems begin.
Which cryptocurrency is more profitable to mine?
Regardless of what systems are used by each cryptocurrency, the common user wants to know whether Bitcoin or Ethereum is better to mine. The approaches to mining these cryptocurrencies differ significantly.
Bitcoin on the SHA-256 algorithm today can only be mined on powerful ASICs, special devices that are sharpened exclusively for calculating hashes of cryptocurrency blocks. Since the price of the coin is very high, there is a constant influx of large miners and the complexity of the network is growing all the time, which leads to the rapid expansion of equipment beyond profitability.
Such an arms race has almost completely pushed ordinary miners out of Bitcoin mining. Since 2017, mining Bitcoin on graphic processors has become unprofitable, but at the beginning of its existence this network was distinguished by its accessibility to everyone, it was profitable to mine even on simple CPUs.
Ethereum mining is still profitable on a few good video cards, but ASIC manufacturers are trying to get here as well. So far, the system uses the Ethash mining algorithm and resists this, but how long this situation will last is unknown. The complexity of the network is increasing, and single mining is becoming less common, most of the miners work in pools, hoping to catch the block by joint efforts. Only ETH is now available to ordinary users for mining.
So which of the two cryptocurrencies is better?
Determining which is better, Bitcoin or Ethereum, let us dwell on the fact that these are completely different projects that solve their problems and are unlikely to be able to replace each other.
Bitcoin is recognized by users as a means of payment and currency for investment and savings. Its users are investors and buyers of services and goods.
Ethereum is a system in which the role of the cryptocurrency is not so great. Here in the first place are decentralized applications and smart contracts, the consumers of which will be businesses, IT companies, and startup developers.
Some experts believe that Ethereum will soon push Bitcoin out of the lead. However, given how many times Bitcoin was predicted a quick and inevitable collapse, it is worth treating such statements with a fair amount of skepticism.