After Bitcoin or BTC, the next in line is the native crypto of Ethereum, Ether or ETH network. Ethereum is the second-largest cryptocurrency after BTC, and it is natural to compare these two coins. Ethereum is a network where people or developers can build their own contracts and Open account, which are known as smart contracts. It is not similar to BTC.
How BTC and ETH perform often serves as the touchstone to measure the predominant health of the market of cryptocurrencies. Irrespective of their authority, these cryptos are functional in their own ways. Let us now look at the in-depth comparison of these popular crypto coins.
BTC vs ETH – Key Differences
Although both the networks of Ethereum and Bitcoin are powered by the concept of cryptography and distributed ledgers, they technically differ in several ways.
1. Mining
Under Bitcoin, the miners can validate the transactions with the help of proof of work methodology, which is the same method used for Ethereum. The miners worldwide try resolving the complex mathematical puzzles to turn out as the first ones adding a block to the blockchain under the proof of work.
In the case of Ethereum, they operate while moving to different kinds of transaction validations, which is considered proof of stake. An individual might easily start mining or validating the transactions in a block based on the number of coins he owns under the proof of stake method.
Each time the miner adds a block to the blockchain in Bitcoin, he is awarded 6.25 bitcoins, a rate fixed on November 2021. Under Ethereum, validators or miners get 3 ether each time the block gets added to the blockchain, and the reward is bisected.
2. Concepts
When you start trading in bitcoin on the Bitcoin circuit, it allows peer-to-peer transactions as it works as a replacement for paper money. You need not pay the higher transaction fees and you do not need to depend on a custodian authority like bank to make transactions with BTC.
Ethereum allows peer-to-peer transactions too. However, it also offers a platform to create and build smart contracts under distributed apps. The smart contract enables its users to exchange anything that includes values, like real estate, shares, money, and more.
3. Time
Bitcoin takes 10 minutes, while 12 to 15 seconds is the average time taken by Ethereum to add a block to the blockchain. So, miners can mine ETH with less effort and they can save their power consumption cost. Even ETH mining process is easier than BTC mining.
4. Algorithms that include hash
The algorithms using hash considers how these systems maintain their privacy while ensuring their security. Bitcoin uses the hashing algorithm considered SHA-256. Ethereum uses, Ethash, which is considered the cryptographic algorithm.
5. Fees
Bitcoin involves optional transaction fees. You can make cross-border transactions with BTC at less transaction fees, and you can use it as a global currency.
You should even offer some amount of ether for successful transactions done on Ethereum. Ether can be converted to gas which is a unit. The gas drives this mathematics and calculations, allowing the transactions to get added to this blockchain.
6. Proof of Work or (PoW)/Proof of Stake (PoS)
Bitcoin allows the entire network nodes to agree on the state of information recorded and prevents a few specific attacks on the networks using the proof of work or the consensus protocol. Ethereum even moved to the PoS or the proof of stake in September 2022, a set of interconnected upgrades, making Ethereum highly sustainable and secured.
7. Future
Ethereum is the ecosystem growing through every hurdle, thanking the rising popularity of the dApps across areas including finance (DeFi apps or decentralized finance), collectibles (NFTs or non-fungible tokens), and arts, technology and gaming. Ethereum even introduces sharding at times during 2023 enhancing these scalabilities.
Bitcoin has even experienced the changes which introduced the Taproot upgrade allowing room for smart contracts. The Bitcoin Lightning Network is the other project that gets worked on as the second-layer protocol intending to take every transaction off the chain to pace up the network.
Conclusion
Although Bitcoin works better as a transactional system, including a peer-to-peer network, Ethereum operates well whenever you require creating and building distributed apps and smart contracts. The pick is completely on you in picking the winner between Bitcoin and Ethereum.
