Bitcoin (BTC) Vs Ethereum (ETH) [2019 Review]: Two generations of cryptocurrency

Today we have over 2,000 digital currencies. All of them are struggling to attract attention, develop their technology a little better and faster than opposition, and establish dominance in the encrypted market. However, even today, the two most spoken coins remain those that represent the first and second generation of crypto-Bitcoin (BTC) and Ethereum (ETH).

The two are not exactly rivals, because they do not aim to do the same thing. Bitcoin is still the number one digital currency up to 10 years after its birth. Ethereum is less than four years old, but its appearance has marked a big difference in the way we see cryptocurrency and blockchain. However, it remains one of the biggest questions on these two coins: which one is better? Compare them and find out.

Bitcoin (BTC)

Before actually comparing the two, let's first look at each coin first. Bitcoin, for example, is a distributed P2P digital currency that aims to provide its holders with instant and secure payments, anywhere in the world. It was introduced by an anonymous individual or group, known only to alias Satoshi Nakamoto.

Nakamoto published the Bitcoin white paper on October 31, 2008 and presented it as a way to regain the power that banks and other financial institutions are abusing. In this white paper, Bitcoin has been described as a P2P electronic payment system based on blockchain technology.

Blockchain technology is a public ledger that records all transactions performed and prevents data manipulation. This makes it an excellent way to track transaction history, but it also has numerous other use cases, which will be discussed later. Blockchain, as the name suggests, consists of blocks, which are basically groups of transactions that come together and are verified by Bitcoin miners.

Miners receive a reward in the form of new BTC coins to "solve" the blocks, ie how the system works without any form of central authority.

Ethereum (ETH)

Ethereum is the representative of the second generation of cryptocurrencies, and for years it was the second largest currency by market capitalization. He only lost that level recently, but many believe he will eventually recover it. The launch of this altcoin represents a major turning point in the blockchain and crypto world, as it has introduced further use cases for blockchain technology.

Until ETH did not materialize, the only purpose of the blockchain was to support cryptocurrencies. However, Ethereum stressed that its technology can be used in many different ways, for example for creating decentralized apps, smart contracts and the like. This was only a start, though, as developers have now realized that there are new ways in which blockchain can be used. Because of its nature, it can prevent things like fraud, censorship or downtime. It is even resistant to interference from third parties and so the potential for the next generation of the Internet was born.

This is also the biggest difference between Bitcoin and Ethereum. While Bitcoin is a cryptocurrency – a form of online money that is used to make payments, Ethereum is a platform that uses its own currency, Ether (ETH).

Bitcoin against Ethereum

As we have already seen, it is difficult to talk about these two coins without immediately noticing the differences. They are considered cryptocurrencies, despite the fact that Ethereum is only a cryptocurrency as well as being something bigger.

Another big difference between the two is the way the mines work for them. As mentioned, blockchain technology is at the heart of both these projects. However, the difference lies in their consent algorithms, as they use different ones. Bitcoin uses a PoW algorithm, in which the miners' prizes are based on the amount of computing power they use to solve the blocks. More computing power provided means greater reward, but also greater resource consumption, leading to larger invoices.

Ethereum does things differently and uses the PoS algorithm. Here, the probability of validating a block does not depend on the users' computer power, but on the size of an interest they hold. In other words, it all depends on how many ETH coins you have. In addition, they do not receive block premiums, but instead receive network commissions as a reward and this premium is called gas.

Another difference that is worth mentioning is the speed of the two. Ethereum can process twice as many transactions per second as Bitcoin, but it does so much faster.

When it comes to their prices, there is also a big difference. Bitcoin's historical maximum was over $ 20,000 per coin, while the highest ETH price was around $ 1,400. Both prices were reached at the end of 2017. However, Bitcoin started 2017 with the value of $ 900, which means it has managed to grow more than 20 times by the end of the year. ETH, however, started with a price of only $ 10, which means it had a 140-fold increase.

Both currencies suffered heavy losses in 2018 due to a steady bear market, and ETH lost its place as the second currency by market capitalization for XRP only a few days ago. However, none of these coins is dead, and both are expected to return at some point in the near future.

Conclusion of Bitcoin Ethereum against

And this is all. Obviously, the two are too different to be compared directly and can not even be considered competitors. They have different goals in mind and serve different purposes. In a sense, both are the number one, Bitcoin is only larger in terms of value and market capitalization. Although, it must be said that Bitcoin had 10 years to grow in this size, while ETH had only 3. It is possible that both coins will be replaced by younger, more advanced coins at some point. However, for now, Bitcoin and Ethereum remain among the largest and most popular coins in space.