Bitcoin vs. Ethereum: A side-by-side comparison | finder.com

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Bitcoin vs Ethereum

Bitcoin and Ethereum are the two most valuable cryptocurrencies by market value — how do they differ?

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Bitcoin and Ethereum are the two biggest giants of the cryptocurrency world, in terms of market cap volume. Bitcoin (BTC) was the first coin and Ethereum (ETH) followed a few years later. Both have had a similarly rocky past with many spikes and dips, and both are decentralized and owned by people all over the world.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade.

A note on the history of Bitcoin and Ethereum

Ethereum was initially created as a “hard fork” of Bitcoin, so its programming is almost the same. The main difference is that ETH has built-in “smart contract” technology, which Bitcoin doesn’t. A hard fork was necessary to create this new coin, essentially setting Ethereum on a different course from Bitcoin.

In the case of Ethereum, someone added “smart contracts” and other changes to the Bitcoin software. People who liked the sound of that went and followed Ethereum, while others stayed behind. Some people bounced between both, using each for its specific purpose.

If you’ve ever heard that Ethereum and Bitcoin are the same, this may be why. Due to the hard fork there are now there are two coins where there used to be one.

Basics of Ethereum vs Bitcoin

Looking at the basic breakdown of Ethereum vs Bitcoin can help clear up some of the confusion on the two coins.

Ethereum vs Bitcoin basics:

BitcoinEthereum
Launch dateJanuary 2009July 2015
Intended purposeStore of value/medium of exchangePlatform for immutable, programmable smart contracts
Consensus algorithmProof of work (SHA-256)Proof of work (Ethash)
Max supply21 millionUnlimited

In short, you could argue the main difference between Bitcoin and Ethereum is that Ethereum supports smart contracts by default, while Bitcoin does not. A smart contract is a type of autonomous decentralized application, which is one of the reasons everyone’s so excited about cryptocurrencies and the blockchain. A smart contract is like having a robot that can do things automatically and can’t be hacked or tampered with.

Differences

The key differences between Bitcoin and Ethereum are what led to the hard fork that created Ethereum in the first place. Although both are cryptocurrencies and both are considered to be some of the most valuable coins, key differences include:

  • Supply – There will never be more than 21 million bitcoin in existence. It’s expected to reach this limit by around 2140. Meanwhile, ETH has an unlimited supply, but the creation of new coins is very tightly controlled to keep inflation from ruining the coin’s value.
  • Standardization methods – Ethereum has developed its own industry standard, called ERC20. This is like a set of measurements for cryptocurrency to allow for greater compatibility between multiple currencies.
  • Market cap value – Even though the exact number changes frequently, Bitcoin has always had a larger market cap value than Ethereum and every other cryptocurrency.

Price of Bitcoin vs Ethereum

Bitcoin

1
0
Updated: 08 Mar 2021 09:48:28 UTC

Ethereum

1
0
Updated: 08 Mar 2021 09:48:28 UTC

Similarities

There are a lot of similarities other than the programming.

  • Both coins are valuable: At the time of writing, bitcoin and Ethereum are the No. 1 and 2 coins, respectively, in terms of market cap. They’re the world’s biggest and most valuable cryptocurrencies.
  • Both coins are popular: Even with hundreds of other cryptocurrencies now in existence, bitcoin and Ethereum remain widely used.
  • Both coins are old: Some of the newer coins outperform bitcoin and Ethereum in various ways. Other coins are quicker to transfer, have lower fees or have extra features.
  • Both coins use proof-of-work mining: Mining is how transactions are processed on the blockchain. Back when bitcoin and Ethereum were created, proof-of-work mining was how all cryptocurrencies handled transactions. These days, not all coins use proof of work, and some coins don’t even need mining.

Scalability

The bitcoin solution to the scaling problem

Over the years, bitcoin has had other hard forks that were specifically designed to solve its scaling problem.

The Ethereum fork was designed to add smart contracts. But other hard forks were designed to make transactions faster and cheaper, to help accommodate all the extra users that were arriving, such as Litecoin and Bitcoin Cash.

But the bitcoin as we know it today resisted those hard forks and remained unchanged. Instead, it introduced a system called “SegWit” and has future plans of creating something called the “Lightning Network”.

  • SegWit: A new way of arranging data to make transfers faster and easier. The downside is that you can only use SegWit with certain wallets and certain exchanges. This basically means that bitcoin users have to turn SegWit on and off to use it properly. If it’s turned on, or off, at the wrong time when sending money, traders risk losing their bitcoin. For this reason, most people seem to just keep it turned off.
  • The Lightning Network: A system that basically involves setting up multiple payment channels to go around the blockchain. The idea is to keep smaller transactions off the main bitcoin network. At the beginning of 2018, it was still under development.

The Ethereum solution to the scaling problem

Ethereum’s smart contracts are extremely useful but can also slow down the network, especially when there are a lot of complicated smart contracts with a lot of different steps.

It needed different solutions. Its planned updates include:

  • Plasma: The Plasma update will only broadcast smart contracts to the main Ethereum blockchain after the contract’s completion. Basically, it moves all the complicated and slow parts behind the scenes and only puts the final result on the main blockchain. This could prevent smart contracts, especially more complicated ones, from slowing down the network.
  • Casper: This is a major change. It involves switching from the old proof-of-work mining system to a new and more efficient proof-of-stake algorithm. Rather than having computers solve problems to verify blocks, it will instead have people verify transactions simply by holding ETH in their wallets. It’s an increasingly common mining method for new coins, but modifying an old blockchain like Ethereum is a lot more difficult.

Where to buy BTC and ETH

Many exchanges will trade both Bitcoin and Ethereum, making it possible to pick one exchange and trade both popular cryptocurrencies.

Name Product Deposit methods Fiat Currencies Cryptocurrencies
eToro USA Cryptocurrency Trading
Wire transfer, Online banking
USD

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Gemini Cryptocurrency Exchange
Bank transfer (ACH)
USD, AUD, CAD, EUR, GBP, SGD, HKD

26
cryptocurrencies

Trade bitcoin, Ethereum and more at a US-based exchange where payments can be made in USD.
Coinbase Digital Currency Exchange
Bank transfer (ACH), Credit card, Debit card, Bank transfer (SEPA), Wire transfer
USD, EUR, GBP, CAD, MXN, HRK, CZK, DKK, CLP, BGN & 10+ more

43
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Buy and sell major cryptocurrencies on one of the world's most renowned cryptocurrency exchanges.
Crypto.com App
Credit card, Cryptocurrency, PayPal, TransferWise, SEPA
USD, AUD, CAD, CHF, EUR, GBP, NZD, SGD, JPY, ZAR & 9+ more

67
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Finder Exclusive: Get 0% fees on credit/debit card purchases for 30 days after signup.
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KuCoin Cryptocurrency Exchange
Cryptocurrency, Interac e-Transfer, PayPal, Wire transfer, Credit or Debit Card
USD, EUR, GBP, RUB, CNY, AUD, KRW, JPY, TRY, VND & 40+ more

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Finder Exclusive: Get up to 10 USDT in trading fee rebates for signing up and making a deposit, and up to 30 USDT in trading fee rebates after buying with fiat. T&Cs apply.
Browse a variety of coin offerings in one of the largest multi-cryptocurrency exchanges and pay in cryptocurrency.
CEX.IO Cryptocurrency Exchange
Bank transfer, Credit card, Cryptocurrency, SWIFT, SEPA, Faster Payments (FPS)
USD, EUR, GBP, RUB

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Disclaimer: Highly volatile investment product. Your capital is at risk.
Use your USD, EUR or RUB to buy and sell cryptocurrency at competitive exchange rates and with high maximums for verified accounts.
Coinmama Cryptocurrency Marketplace
Bank transfer, Credit card, Debit card, SWIFT, SEPA
USD, EUR, AUD, CAD, GBP, JPY

10
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Founded in 2013, CoinMama lets you buy and sell popular cryptos with a range of payment options and quick delivery.
Paxful P2P Cryptocurrency Marketplace
Bank transfer, Cash, Cryptocurrency, PayPal, Credit or Debit Card, Payoneer
DZD, XCD, ARS, AMD, AWG, AUD, AZN, BSD, BHD, BDT & 140+ more

2
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Connect with bitcoin buyers and sellers through this peer-to-peer marketplace that accepts cash, credit and more than 300 other payment methods.
Revolut Cryptocurrency App
Revolut Cryptocurrency App
Bank transfer (ACH), Bank transfer (SEPA), SWIFT, Credit or Debit Card
USD, EUR, GBP, CAD, NZD, JPY, HKD, NOK, DKK & 9 more

4
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Buy and sell several popular cryptocurrencies through your Revolut account, set up recurring purchases and transfer it to other US users. You can’t transfer cryptocurrency to anyone who does not have an active Revolut account. Service not available in Tennessee.
Robinhood Cryptocurrency Exchange
Robinhood Cryptocurrency Exchange
Bank transfer, Cash, Debit card
USD

17
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Trade a handful of leading cryptocurrencies with this easy to use mobile app.
Kraken Cryptocurrency Exchange
Bank transfer, Cryptocurrency, SWIFT, Wire transfer, Osko, SEPA
USD, EUR, GBP, JPY, CAD, CHF, AUD

56
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Buy, sell and trade a range of digital currencies on this high-liquidity exchange – suitable for beginners right through to advanced traders.
CoinSwitch Cryptocurrency Exchange
Credit card
USD, JPY, RUB, EUR

387
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CoinSwitch allows you to compare and convert over 250 cryptocurrencies across all exchanges.
Binance.US Cryptocurrency Exchange
Bank transfer (ACH), Bank transfer, Cryptocurrency, Debit card, Wire transfer
USD

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Get a US$15 bonus when you trade US$100 or more of any supported crypto. T&Cs apply.
Trade with USD on Binance.US, the American dollar onramp of the world’s largest cryptocurrency exchange. Non-US residents can read our review of Binance's main exchange here.
ZenGo Cryptocurrency App
ZenGo Cryptocurrency App
Bank transfer (ACH)
USD

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Take advantage of ZenGo's unique self-custody system to buy, sell and spend and earn cryptocurrency in your own wallet.
SatoshiTango Cryptocurrency Exchange
SatoshiTango Cryptocurrency Exchange
Bank transfer, Cash, Cryptocurrency, Bank transfer (SEPA)
ARS, USD, EUR

5
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SatoshiTango is an Argentina-based marketplace that allows you to easily buy, sell or trade Bitcoins.
Huobi Cryptocurrency Exchange
AdvCash, Cryptocurrency, SWIFT, Wire transfer
GBP, USD, AUD, EUR, INR, BRL, KHR, CAD,CNY, NZD & 15+ more

218
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Huobi is a digital currency exchange that allows its users to trade more than 190 cryptocurrency pairs.
Coinbase Pro
Bank transfer, Cryptocurrency, Debit card, PayPal, Wire transfer
USD, EUR, GBP

27
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Formerly known as GDAX, Coinbase Pro is a US-based exchange which offers fiat currency payment options, including wire transfer, ACH bank transfer and SEPA.
Bitstamp Cryptocurrency Exchange
Bank transfer, Cryptocurrency, Credit or Debit Card, SEPA, Faster Payments (FPS)
USD, EUR

5
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A global cryptocurrency exchange that facilitates crypto to fiat transactions, where you can use EUR or USD to buy bitcoin and popular altcoins.
ShapeShift Cryptocurrency Exchange
Credit card, Cryptocurrency, Debit card, Banxa
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Quickly swap between more than 40 cryptocurrency assets or use your credit card to instantly buy bitcoin.
Gate.io Cryptocurrency Exchange
Cryptocurrency
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Bitit Cryptocurrency Marketplace
Bank transfer, Cashlib, Credit card, Neosurf, SEPA
EUR, USD, JPY, DKK, GBP, SEK, NOK, TRY & 5+ more

50
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Buy cryptocurrency with cash or credit card and get express delivery in as little as 10 minutes.
CoinBene Cryptocurrency Exchange
CoinBene Cryptocurrency Exchange
Cryptocurrency
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Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

The future of Ethereum vs Bitcoin

There are many planned “cross-chain” developments. These are designed to let people connect different blockchains together and transfer coins more freely among them. Bitcoin and Ethereum started off being very similar and then got very different over time. But now they’re both coming back to meet in the middle with similar features and easier integrations with each other.

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