The Difference Between Bitcoin and Ethereum for Beginners
Are you new to cryptocurrency and confused about the difference between the different types that are available? Today I will touch the surface layer with a few differences between Bitcoin and Ethereum for starters.
Bitcoin was created in 2008 by one or more people with the pseudonym ‘Satoshi Nakamoto’. There are many different thoughts as to who is behind the name. Only time will tell if the big reveal ever happens. The first bitcoin transaction took place in January of 2009. It was created as a peer-to-peer electronic currency as another option for those who did not want to go with traditional banks. That being said it eventually became a great store of value as we see today. Many believe that it will soon over power Gold in market cap. Today the Gold market capitalization is estimated to be around 3 trillion US Dollars with Bitcoin sitting at $284.2 billion US Dollars. The difference between the two is that Gold can still be found around the world whereas Bitcoin is mined through code. The most Bitcoin that will ever be available for people to own are 21 million. That being said, 21 million Bitcoin (BTC) will never fully be mined (group of computers joined to the BTC network.. more in link below on this) because every four years the amount being mined cuts in half. Once every full Bitcoin has been mined and either put on exchanges or stored in Bitcoin wallets, that is it. Every Bitcoin will be in existence. This will not happen until approximately 2140. What makes Bitcoin trust less is the fact that it is purchased by the user and stored by the user in his or her cryptocurrency wallet of choice. They manage their own funds, noone else.
With all of the big corporations adopting and speaking more positively about Bitcoin (PayPal, JP Morgan, etc.) there is no doubting it is becoming more of an every day word when speaking of investments. Bitcoin has become more of a store of value rather than a peer-to-peer electronic cash system. This also has to do with transaction fees and how fast it may move from one wallet to another. If you want to learn more about Bitcoin check the link at the end of this article!
Ethereum went live in July 2015 and was created by Vitalik Buterin. Ethereum (ETH) is mined the same way Bitcoin is mined (by computers joined to the Ethereum network). When Vitalik had the idea for Ethereum he had proposed it to the Bitcoin community first. Ideas were to be able to build on top of the platform / network to include such things as decentralized finance and other applications. When it did not go over so well because of the consensus he decided to take it into his own hands and create the Ethereum network. There were other co-founders as well, one being Charles Hoskinson who has went on to create the Cardano network (more on this in a future article at a later date!). Ethereum has the ability to launch many different types of tokens such as ERC-20, ERC-721 and ERC-1155. Each one used in it’s own way. Some for art on a blockchain (Non-Fungible Tokens or NFT’s ERC-721) and others for different tools/weapons/skins/vehicles/etc in online gaming (ERC-1155). Although Ethereum does not have a max supply its circulating supply is currently 113,355,662 at the time of writing this article.
In summation, Ethereum has the ability to have projects built on top of its platform while Bitcoin does not. With the upcoming release of Ethereum 2.0 (as of now release is projected to be December 1, 2020 however if there are not enough Ethereum to be staked this will most likely be postponed. With Ethereum moving over to ETH 2.0 we could see a bit more scarcity since a lot of ETH will be staked or locked up for an amount of time. It must be noted that some of the fees for sending ETH will also be burned when 2.0 launches.. Something we will just have to have patience with and find out.) Ethereum is definitely a project to keep an eye on.
I hope you have enjoyed the article and can take a bit of information away from it. It will be interesting to see what the next two years brings us in the cryptocurrency space. If you did appreciate the article feel free to visit my website for my social media links as well as my E-Book listed below.
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