Cryptocurrency is a digital or a virtual money used for a transaction. People might be confused about the term ‘cryptocurrency’. Are they digital cash or like a gold? New technology to trade online or to store value? There are many cryptocurrencies with different purpose and values! But for a beginner, who is willing to invest in cryptocurrency for the first time, your first query would be which is the best cryptocurrency? Bitcoin or Ethereum?
For you, Bitcoin and Ethereum are like comparing Apple and Microsoft, two tech-giant! Both are different from each other but serves the best. Similarly, other cryptocurrencies share a lot of similarity with Bitcoin and Ethereum. For instance, NEO is a lot more like Ethereum and Litecoin is a lot more like Bitcoin. But today, we will focus on Bitcoin and Ethereum! But let us learn few terms so that the topic becomes easy for you to understand!
Bitcoin or Ethereum – Learn few Jargons
You must have already heard about “BlockChain” in news or any other website. Have you ever heard about log files? Records? The blockchain is a digital ledger used to maintain the records of various cryptocurrency transactions. Here, the ledger is distributed, which means many computer system or nodes work together! That is why it is impossible to verify any transactions. More the nodes, more secure blockchain will be! Well, the exact number of Bitcoin nodes is unknown but some sources claim that it is around 100,000.
It is a decentralized tool. Decentralized is a term used when no government body or any other physical body is involved!
Ethereum introduced Smart contracts to the world in 2015. Smart Contracts can allow you to specify conditions in your transactions! Using smart contracts, developers can create applications that cannot go offline and no third-party can alter it.
Bitcoin or Ethereum – Which is the best alternative
It is not really easy to predict the values of different cryptocurrency. No one knows whether the prices will increase or not. In addition to it, there is no government authority involved. Therefore, researching about cryptocurrency is very confusing. But don’t worry, we are here to help you out! After all, we are all beginners at some point.
When it comes to cryptocurrency, age is an important factor. Bitcoin was the first digital currency. It was released in 2009 and still rules the virtual cash world! Bitcoin aims to fix the problems referred to as the “bank of the people.” No third-party required for the transaction. You can easily convert bitcoin into cash! It just takes few minutes to complete the transaction. Bitcoin (BTC) is stack-based language.
Introduced in 2015, Ethereum is a potential alternative. Ethereum’s blockchain widely known as “Blockchain 2.0”
Blockchain technology is used to create applications other than just supporting a digital currency. Such type of applications is often referred to as Crypto 2.0, Blockchain 2.0 or Bitcoin 2.0.
No third-party is required in most of the system because of smart contracts the transactions. It provides you to build smart contract apps called distributed applications (dApps) using a programming language called Solidity. Ether is its currency, it uses Ethereum blockchain. These transactions take few seconds!
It is nothing but a tore of value and asset. WIth bitcoins, you can also send money. The purpose of bitcoin is to offer an alternative to a regular cash. Thus, bitcoin a medium of payment transaction and store of value. So, when you think about Bitcoins, you should refer to it as “Digital cash.”
The major role of Ether is to facilitate and monetize the working of Ethereum. This enables developers to build and run ĐApps which allows you to send tokens with indicates values. These values can be anything and not just digital currencies. When you think about Ethereum, think of it as a “Smart Contracts.”
Speed of transaction
This is an important factor in differentiation. The speed of your trading matters a lot when you have to deal with thousands of transactions in a day!
Bitcoin is lagging behind when it comes to speed! Bitcoin’s block time is in minutes.
Here comes Ethereum! It’s block time is in seconds! You can send and receive currency in just seconds! By the time you complete reading this sentence, you can get your transaction done!
Transactions in bitcoins look like this:
X sends 100 BTC (Bitcoins) to Y.
Bitcoins transactions are manual.
Ethereum’s transactions run on smart contracts applications and look like this:
Send 100 ETH (Ether) from X to Y if X’s balance is 50 ETH and the date is 12.06.2018.
Ethereum’s transactions are automatic!
Coin supply in Bitcoin is limited to 21,000,000 coins. This creates healthy supply and demand for a store of value.
It is not limited because the production of Ether is continuous. But in future, the supply of Ether might slow down.
The purpose of Bitcoin is to serve a peer-to-peer digital currency, used for any financial transactions. Since it is decentralized, it eliminates the need for third parties in payment method. Bitcoin has low coin supply and it is more liquid in nature. Bitcoin has a better position in Market.
The main purpose of Ethereum is to run decentralized smart-contract applications based on blockchain technology. This does not go offline and cannot be altered. It provides users with a platform to build the applications and do programming. Ethereum is more advanced in terms of technology. If you are willing to make a regular transaction, then Ethereum is a far better option than Bitcoin. Why? Because it is scalable and you can manage it easily. Its blockchain is far better than Bitcoin and you can send money in just a few seconds!
Though Bitcoin is more popular in the market, Ethereum has great technology and potential.
So, what do you think which is better Bitcoin or Ethereum? Before choosing any cryptocurrency, make sure you do a thorough research on it because a digital currency is young and unpredictable!
Tech-savvy and a passionate blogger. I have done software engineering from the University of Mumbai. Technology Specialist 2.0 in DOT NET. I also have my personal website http://glamourbytes.com/