Cryptocurrency is becoming increasingly popular, but not all blockchain technologies are created equal. Two of the most common names floating around the Internet – Bitcoin and Ethereum – are among the most-used forms of cryptocurrency, yet they differ in significant ways. There are crucial differences between Bitcoin and Ethereum, including what a wallet-holder and do with them, how companies leverage the technology, and how they are used in 2022.
What is Bitcoin?
Bitcoin (BTC) is a digital currency. The first of its kind, this form of cryptocurrency is digital money that is able to operate outside of a government’s control. As a result, bitcoin valuation is largely determined by supply and demand. It is not tied to any standard. This means bitcoin investors and holders can see large gains and losses in a short period of time. Bitcoin is among the most widely accepted forms of cryptocurrency. Several major companies, including Microsoft, certain Burger King franchises, and Twitch, will now accept Bitcoin and Bitcoin Cash as payment for goods and services.
What is Ethereum?
Unlike Bitcoin, Ethereum (ETH) is a ledger technology. This means the companies can use Ethereum to build new programs. More specifically, ledger technology is a digital system that records transactions of assets. However, unlike a standard bank or payroll distribution software, these transactions are recorded in several places at the same time. Ethereum can function as a bank does in providing various financial services, but there is no need for an intermediary, like an exchange or brokerage. To that end, there is no centralized data storage center. Still, many use Ethereum like they use Bitcoin: as currency.
Key Differences Between Bitcoin and Ethereum
There are several similarities between Bitcoin and Ethereum. They both utilize blockchain technology, they can both live in digital cryptocurrency wallets, and both tokens are decentralized. Neither Ethereum nor Bitcoin is regulated by any authority.
However, Ethereum has more applications than Bitcoin, which contributes to a frequently higher valuation. Ethereum maintains both a payment network and also stores computer code. This code is tamper-proof, which means it can power all types of technological applications – from financial contracts to business inventory. Both Bitcoin and Ethereum make for great investments, especially with the forthcoming expansion of the Metaverse.