Many people are comparing Bitcoin with Ethereum. These two are the most popular crypto networks currently on the market. Bitcoin’s market capitalization stands at $331 billion, while Ethereum’s is $157 billion, but despite the noticeable difference in numbers, the two share both differences and similarities. Let’s explore the similarities and differences between Bitcoin and Ethereum so you can decide whether bitcoin casinos are for you, or whether you should gamble with Ether.
We mentioned Bitcoin and Ethereum being crypto networks and this is because these systems are not cryptocurrencies, but the technology that makes the cryptocurrency possible. Bitcoin’s cryptocurrency is called “bitcoin” (BTC) while Ethereum’s cryptocurrency is called “Ether” (ETH). Bitcoin and Ether are digital currencies that serve as representations of value and are sold and bought as such.
BEGINNINGS OF BITCOIN
Bitcoin launched on January 3rd 2009 as the first digital currency of its kind. Created by an anonymous going under the name of Satoshi Nakamoto, Bitcoin gained popularity over the years while the identity of its creator has not been revealed.
The purpose of Bitcoin was to create a currency outside any government’s control. Because of this reason, Bitcoin is decentralized and not backed by any physical commodity. In this way, it’s created to be more stable than the physical currencies that depend on physical commodities and governments. The value of Bitcoin also lies in its finite number (as opposed to Ethereum which produces an unlimited number of coins).
The mining of Bitcoin also contributed to climate change, since mining for tokens spends huge amounts of electricity, which emits carbon dioxide. Approximately 200 million tonnes have been emitted since Bitcoin’s beginning. Mining, though, is essential for record keeping. In other words, since bitcoin is a virtual currency, miners keep records in blocks of where bitcoins went, who owns them, and other transactions. In this way, the individual is not able to spend the same money multiple times.
A miner who finds a new block can collect all transaction fees from that block. In this way, anyone can become a miner and this system ensures that Bitcoin stays decentralised. There is no central authority to mind the blocks. Instead, many different people (miners) oversee them.
As mentioned, Bitcoin is not tied to any physical commodity but Bitcoin addresses. All addresses on the blockchain are public, while the person behind the address remains anonymous.
BEGINNINGS OF ETHEREUM
Ethereum was launched on 30th July 2015 by Canadian programmer Vitalik Buterin. Just like Bitcoin, Ethereum is a decentralized open-source blockchain. However, Ethereum does not serve merely as a currency. It is programmable, which means that others can build applications on it. In this way, NFTs and stablecoins have been programmed on Ethereum and their popularity added to the value of Ethereum not just as a system of decentralized currency, but also as a decentralised operating system.
Ethereum allows permissionless and permissioned transactions, which means that a transaction can be reviewed by any computer in the former, or a specific computer in the latter.
Ethereum went from Proof of Work which Bitcoin still uses, to Proof of Stake, as the method or mechanism used to confirm transactions. This is important because Proof of Work uses electricity to create blocks and as we have mentioned, this creates huge carbon emissions. Proof of Stake, on the other hand, requires cryptocurrency to be staked on a block the individuals want to add to the chain. With this method, less electricity is spent and is much better for the environment.
BITCOIN & ETHEREUM – SIMILARITIES
Both Bitcoin and Ethereum are decentralized digital systems of currencies. Furthermore, both use blockchain technology to keep records of transactions. Both bitcoin and Ether can be used as digital cryptocurrencies in many online casinos and if a casino accepts bitcoin, chances are they also accept Ether.
Both currencies are highly volatile, but they showed a steady increase in value over the years. There are, however, more differences than similarities between the two systems.
BITCOIN & ETHEREUM – DIFFERENCES
The main difference between Bitcoin and Ethereum is their purpose. While they both serve as digital currencies, Bitcoin is made specifically for that, while Ethereum has more than one role. The most notable is Ethereum’s function as the operating system within which anyone can program software. Like this, NFTs and other applications were created.
Next, Bitcoin uses the Proof of Work cryptographic system, while Ethereum moved to Proof of Stake system. Besides the difference in environmental impact, this also makes Ethereum faster, i.e. Ethereum can process more transactions per second than Bitcoin.
Last, Bitcoin has a limited number of bitcoin, while Ethereum creates an unlimited number of Ether. In this way, Bitcoin is more valuable since a limited number of coins creates a higher demand and raises its value and price.
Bitcoin and Ethereum differ in many ways while their currencies, bitcoin and Ether, are pretty similar. They both serve as digital decentralized and open-source currency. Moreover, you can use both bitcoin and Ether currencies in most online crypto casinos.
Bitcoin is currently more valuable than Ether. However, Ethereum processes transactions faster and uses a cryptographic system that requires much less electricity.