Bitcoin is leading the decentralized currency world followed by Ethereum network cryptocurrency, ETH (Ether). People are often seen to be confused while making decisions regarding investment in digital currency in between Bitcoin and Ethereum and usually end up in natural discussions. Market cap had labeled Ether as the second leading cryptocurrency (after Bitcoin) in the world.
While talking about the similarity there are certain things that are similar in them. Both of them are kept in uniquely designed cryptocurrency wallets. These digital tokens are traded through online exchange medium. These digital currencies are completely decentralized as they are free from any regulation under any government body. Government authorities or Central bank play no role in regulation of these digital currencies. Blockchain, the popular distributed ledger technology is utilized here. There are certain aspects that differentiate these renowned decentralized digital currencies too as headed by market cap.
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Bitcoin was a new innovation in digital finance market that emerged as an independent autonomous body without any control of government authorities or Central Bank. Soon after it came into existence people learned that this outcome of blockchain technology, Bitcoin has several other usages too!
Ethereum initiated by offering more and did not restrict itself to decentralized payment network only. It is further used for storage of computer code that is much needed for popular digital application and finance contracts custom. Here one should note that network currency of Ethereum or Ether is regulated through Ethereum contracts and applications. While the Ether was under innovation, the vision was to provide a complement to Bitcoin but today it is standing as the biggest competitor to it among all popular cryptocurrency exchange.
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January, 2009, Satoshi Nakamoto introduced an authoritative guide about Bitcoin, immediately after launching it. Bitcoins have no physical existence and are free from any central or government control. This online currency is balanced through secured public ledger of cryptograph. Earlier several unsuccessful attempts were made on the ground of online currency, but this predecessor has emerged as a successful and popular one among all available cryptocurrencies. Eventually it was accepted among government bodies and other autonomous regulators but perhaps it is yet to occupy the position of formal mode of payment of any value. Though lately it had occupied a special position for itself and today the presence of cryptocurrency in the financial system cannot be denied. Cryptocurrency was at boom in the year 2017 and Bitcoin alone accounted for 87% of the entire cryptocurrency market.
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Blockchain technology is not restricted to enable a digital currency only but move towards creating application too! Ethereum came into existence in the seventh month of 2015 and since then it has emerged as biggest and highly established decentralized software platform.
Ethereum controls fraud, downtime, interference or stealing data from any third party as it enables dapps (deployment of small contracts and decentralized applications). It is designed with its own set of programming language that can run only on blockchain, helping developers to use undisturbed applications.
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ETH, the native cryptographic token powers the function of Ethereum. In the year 2014, Ethereum tried secret selling of Ether and was surprised with unexpected endless positive response. Ether is compulsory for using application on Ethereum platform, so for building any application a developer should use Ether only. It is more than digital currency and is largely used as a medium to run application on Ethereum network.
Technically one can notice several differences in between Bitcoin and Ethereum. Any transaction over Ethereum network has the codes that are executable whereas while talking about data affixed on Bitcoin, it is used for references only.
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The block time taken for Bitcoin is within some minutes whereas Ether transactions are done in seconds.
Ethereum works with the ethash algorithm whereas Bitcoin follows SHA-256.
Ethereum and Bitcoins hold a different vision. Bitcoin was designed as an alternate to the long lasting paper and plastic currency and today it stood as the popular mode of exchange with an uplifted value. Ethereum was created to develop permanent programmatic application and contracts where only their money can be used.
Bitcoin and Ether fall in the category of digital currency but Ether was created with a separated vision. It was not intended to remain as an alternative measure to traditional monetary system but to accelerate the function of the working of smart contract of Ethereum and dapp (decentralized application) gateway.
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Bitcoin and Ethereum both are a part of block chain and technically they should be complementing each other rather than competing but the pinch of popularity of Ether had turned it into the strongest competitor of Bitcoin among all cryptocurrencies. Traders have a great role to play for turning these complementary currencies into competitors as market cap had ranked Ether very closely to Bitcoin since its launch in 2015.
Ether is still not that popular if one checks the total value of it while comparing it with Bitcoin. By January 2020 the market cap of Ether stood around $16 billion whereas Bitcoin touched $147 billion.