Bitcoin and Ethereum are now two of the most well-known cryptocurrencies that are being used today. If you are new to the world of cryptocurrency, you might wonder about the differences between these two. Although they may appear to be similar at first glance, they’re quite distinct from each other.
Bitcoin is the first, largest, and most popular well-known cryptocurrency. The concept of Bitcoin emerged during the Global Financial Crisis in 2008, with an anonymous founder known only as Satoshi Nakamoto. Bitcoin was created to offer an alternative to the prevailing financial system, which was perceived as dishonest and lacking transparency.
On the other hand, Ethereum is a blockchain-based platform that enables developers to build decentralized applications (dApps) using smart contracts. It was created in 2015 by Vitalik Buterin and has since become the second-largest cryptocurrency by market capitalization.
The biggest distinction between Ethereum and Bitcoin is how they are used. Ethereum is a platform for creating decentralized apps, whereas Bitcoin is mostly used as a store of value and a method of payment. Their utilization of technology is another notable distinction. Ethereum transitioned to the Proof-of-Stake (PoS) consensus mechanism whereas Bitcoin employs the Proof-of-Work (PoW) consensus algorithm. The PoS method is thought to be more scalable and energy-efficient than the PoW algorithm.
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