If you’ve finally decided to get into the crypto world and are a beginner trader, you might be hearing terms like Bitcoin and Ethereum all around. They’re both cryptocurrencies, but they’re not the same.
Both of these coins dominate headlines, are the top two coins, and are responsible for most of the activity in the crypto space. But if you’re wondering which one to invest in, or just trying to figure out what sets them apart, here’s all you need to know.
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What is Bitcoin?
You’ve probably already seen it being called the “future of money” or “digital gold” because of its scarcity and store of value, but the question of actually what is bitcoin still remains.
Bitcoin is the top cryptocurrency, launched in 2009 by an anonymous name known as Satoshi Nakamoto. The idea was to create a decentralized digital currency that doesn’t rely on banks or middle men.
Bitcoin runs on blockchain technology and has a maximum supply of 21 million coins, which makes it scarce.
What is Ethereum?
Ethereum was launched in 2015 by the programmer Vitalik Buterin along with his team of co-founders. While Bitcoin was created to be digital money, Ethereum was created to be a platform.
What kind of platform? One where developers can build apps, called decentralised applications (dApps), that live on the blockchain. Ethereum introduced smart contracts, which are like code-based agreements that execute automatically without the need for a middleman or a lawyer.
So, instead of just sending or storing value like BTC, Ethereum lets people build stuff.
The Core Differences
Let’s break down the key features of Bitcoin and Ethereum.
- Bitcoin was created to be a currency, while Ethereum is a decentralised platform.
- Supply limit. There are only 21 million bitcoins in existence, and Ethereum has no fixed supply.
- Use case. Bitcoin is mostly used as an investment or digital store of value. Ethereum, on the other hand, can be used for building apps and NFTs.
Which One Should You Choose?
It depends on your preference and goals.
If you’re looking for something to hold long term, like digital gold, or want to keep your assets outside of traditional finance, Bitcoin should be your first choice. It’s simpler, a bit more secure, and less likely to overwhelm you.
But if you’re into the tech, the innovation, and the future of decentralised internet, Ethereum is where that action is. It’s the place for all things crypto innovation like DeFi, Web3, and NFTs.
There’s no need to choose one over the other, though. A lot of crypto users hold both for different reasons.
Is One Better Than the Other?
The question of Bitcoin being better than Ethereum, or vice versa, doesn’t really hold up well because they’re both very different.
Bitcoin is conservative and secure, focusing on being a reliable alternative to traditional money. And Ethereum is experimental, evolving, and way more versatile, trying to build a whole new internet.
Both of them do focus on decentralisation, so it depends on what you’re looking for to consider which one is better for you. In a nutshell, Bitcoin is for storing value safely, while Ethereum is for building things.
