While Bitcoin continues to be the most popular crypto currency on the planet, the Ethereum network with their crypto currency Ether is still gaining traction. In this article, we will explore some of the unique features of Ether and Ethereum when comparing it to Bitcoin.
Both currencies have something in common and that is the fact that they are both crypto currencies and there is blockchain technology behind. If you only intend to use crypto currency for payments, there are not that many differences between the two.
Should I choose Ethereum over Bitcoin?
It is impossible to answer which currency is the “best”. It also depends on the use case. If you want to try out some dApps (decentralized apps), then you should definitely consider buying Ethereum now. It is not possible to use Bitcoin with decentralized applications, as these run on the Ethereum network.
Some pople prefer Bitcoin, because it is the first crypto currency and it has some track record. According to some people, Bitcoin is dead or has been dead. We can conclude that it is not the case as prices seem to rise at the moment of writing this article.
When it comes to payments, Ethereum tends to have lower transaction fees compared to Bitcoin. When Bitcoin is on the rise, transaction volume increases and that results in higher fees. Furthermore, transactions on the Ethereum network are usually faster than the ones on the Bitcoin network.
If the environment is important to you, it might be better to use Ethereum to support the network. Bitcoin uses a lot of energy because of the consensus mechanism. We will explain more about the technical differences between Ethereum and Bitcoin in the next paragraph.
Key differences between Ethereum and Bitcoin
As mentioned before, you will not see a big difference between Ethereum and Bitcoin if you only use it for payments – but it is important to mention that the two differ technically. Transactions on the Ethereum network can contain some executable code. This means you can run code on the blockchain, and that code cannot be stopped. You can include some kind of notes when sending Bitcoin transactions, but that is it.
Bitcoin and Ethereum have different aims. When Bitcoin was created, it was created to replace or be an alternative to fiat currencies (“normal” money). Ethereum was created to facilitate code execution on the blockchain through what is called smart contracts – this is done with the currency Ether. Now you also know the difference between Ethereum and Ether: Ethereum is the network, and Ether is the currency.
As you might know, Bitcoin is currently using the consensus mechanism called proof of work (POW). This requires a lot of energy, and it is not sustainable. Ethereum is currently undergoing a big change. It is trying to go from proof of work to proof of stake (POS). It is a much cleaner consensus mechanism because it is expected to use 99% less energy than the current solution (POW). It is not easy, but the pros outweigh the cons.