So you’ve decided to get into crypto. But where do you start? Two of the most popular networks are Ethereum and Bitcoin. Their tokens also hold most of the market share.
Which of these two is better, though?
Read through this Bitcoin and Ethereum guide. You will first learn what each token and blockchain technology is. Afterward, you’ll find the differences between these tokens and networks.
From there, you can determine who is the winner of Bitcoin vs. Ethereum.
Bitcoin Guide: What Is Bitcoin?
Bitcoin is a decentralized digital currency. It allows users to send funds on a peer-to-peer Bitcoin network without needing a third party. Ledgers containing all Bitcoin currency transactions sit on servers around the world.
You will want to find a Bitcoin buying guide if you want to learn more about how to get this cryptocurrency. Otherwise, if you’re looking for the best Bitcoin ATM network nationwide for instant verification, then look here.
What Is Ethereum?
Ethereum is blockchain technology with its language that allows users to deploy decentralized applications (dApps) and, a digital currency, smart contracts—peer-to-peer transactions.
Applications created using Ethereum are powered by its cryptographic token, Ether (ETH). You can also trade Ether as a digital currency on cryptocurrency exchanges. When holding ETH, you can use it as collateral, a store of value, or to make payments.
Differences Between Ethereum and Bitcoin
The creators of both networks and tokens had different purposes in mind. Bitcoin strives to serve as an alternative to centralized currencies. Whereas, Ethereum wants to create a platform where its currency powers programmatic contracts and applications.
Ethereum networks use Ethash, which is a proof of work (PoW) algorithm, for Ethereum 1.0. It’s the latest and modified version of Dagger-Hashimoto, which was a mining algorithm for Ethereum 1.0.
Whereas, Bitcoin uses double SHA-256, which means that it applies hash functions twice. It generates a 256-bit signature and is used for Bitcoin proof of work.
Secure Hashing Algorithm 256 (SHA-256) outputs a 256 bits long value which is used for transaction verification and address management.
Way They Record Information
Both networks use the proof of work cryptographic proof to prove a certain number of tokens went through a transaction. When using PoW, cryptocurrency miners must buy mining equipment and keep it running to take part in managing the blockchain.
Because of this, they must use a lot of energy, which impacts the environment. Moreover, it causes the prices of mining rig components like graphics processing units to skyrocket.
Sometime in 2022, Ethereum will move to a proof of stake (PoS) system.
PoS only requires validators to spend money once to take part. This move is one of many that are a part of the Eth2 interconnected upgrades. These changes will make Ethereum more sustainable, scalable, and secure.
Bitcoin vs. Ethereum: Which Is Better?
With Ethereum transitioning into proof of stake, this technology, and its token, will provide a more sustainable token. It’ll also have more applications than Bitcoin and its network.
When comparing Bitcoin vs. Ethereum, the latter ecosystem is better at providing a blockchain network. Whereas, the former token holds the highest market cap.
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