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Bitcoin is a decentralized digital currency that was created in 2009. It was invented by an unknown person or group of people using the pseudonym Satoshi Nakamoto. Transactions are made with no middle men – meaning, no banks! Bitcoin can be used to book hotels on Expedia, shop for furniture on Overstock and buy Xbox games. But much of the hype is about getting rich by trading it. The price of bitcoin skyrocketed into the thousands in 2017.
Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services. As of February 2021, there were over 18.6 million bitcoins in circulation with a total market value of around $927 billion. Bitcoin is the most widely used cryptocurrency to date.
Ethereum is a decentralized, open-source blockchain platform that allows smart contracts to be built and run without any downtime, fraud, control, or interference from a third party. The platform was created by Vitalik Buterin in 2013.
Ethereum is not just a platform but also a programming language (Turing complete) running on a blockchain that helps developers build and publish distributed applications (dApps). The native cryptocurrency of the platform is Ether (ETH).
Ethereum allows the creation of custom cryptocurrencies, which can be used to represent virtual shares, assets, proof of membership, and more. These tokens use Ethereum's blockchain as a decentralized platform for their operation. The platform has gained popularity in recent years due to the rise of initial coin offerings (ICOs), which are used to fund the development of new cryptocurrency projects.
As of 2021, Ethereum is the second-largest cryptocurrency by market capitalization, after Bitcoin.
Bitcoin Vs Ethereum: What the Difference
Bitcoin and Ethereum are both decentralized, open-source blockchain platforms, but they have some key differences.
One of the main differences between Bitcoin and Ethereum is the purpose of each platform. Bitcoin was created as a peer-to-peer electronic cash system, with the primary goal of enabling online payments. Ethereum, on the other hand, was developed as a platform that allows for the creation of smart contracts and decentralized applications (dApps).
Another key difference is the programming languages used on each platform. Bitcoin uses a simple scripting language, while Ethereum uses Solidity, a programming language specifically designed for building smart contracts.
Additionally, Ethereum has a more flexible and powerful blockchain, which allows developers to build a wider range of applications on the platform. Bitcoin's blockchain, on the other hand, is limited to the transfer of bitcoins.
Overall, while both Bitcoin and Ethereum have their own unique features and purposes, Ethereum's focus on smart contracts and dApps gives it more versatility as a platform.
Proof of Work vs. Proof of Stake
Proof of Work (PoW) and Proof of Stake (PoS) are two different consensus mechanisms that are used to secure blockchain networks.
Proof of Work is a system that requires users to perform a certain amount of work, or computational power, in order to create a new block on the blockchain. This work is often referred to as "mining" and the users who perform it are called "miners." Miners compete to solve complex mathematical problems, and the first one to solve the problem gets to create the new block and earn a reward.
Proof of Stake, on the other hand, does not require users to perform any work in order to create new blocks. Instead, the creator of a new block is chosen based on their stake, or the amount of cryptocurrency they hold, in the network. The idea behind this is that users with a larger stake in the network have a greater "skin in the game" and are therefore more incentivized to act in the best interests of the network.
PoW and PoS are just two of the many different consensus mechanisms that have been developed for blockchain networks. Each has its own pros and cons, and the right choice for a particular network depends on a variety of factors.
Bitcoin Vs Ethereum: Purposes
As I mentioned earlier, Bitcoin and Ethereum are both decentralized, open-source blockchain platforms, but they have different purposes.
The main purpose of Bitcoin is to act as a decentralized, peer-to-peer electronic cash system that allows users to send and receive payments without the need for a central authority. Bitcoin uses a Proof of Work consensus mechanism, which requires users to perform work in the form of mining in order to create new blocks on the blockchain and earn a reward.
The purpose of Ethereum is to enable the development of decentralized applications (dApps) and smart contracts. Ethereum uses a Turing-complete programming language called Solidity, which allows developers to build a wide range of applications on the platform. Ethereum uses a Proof of Stake consensus mechanism, which allows users to create new blocks on the blockchain by staking their ETH (Ethereum's native cryptocurrency).
So, while both Bitcoin and Ethereum are blockchain platforms, they have different purposes and use different consensus mechanisms to secure their networks.
Future Bitcoin vs Ethereum
It is difficult to predict the future of Bitcoin and Ethereum, as the cryptocurrency market is highly volatile and subject to many external factors. That being said, both Bitcoin and Ethereum have seen tremendous growth in recent years and have established themselves as leading cryptocurrencies.
Bitcoin, as the first and most widely adopted cryptocurrency, has a strong network effect and is widely accepted as a store of value and means of exchange. It is likely that Bitcoin will continue to be a dominant player in the cryptocurrency market in the future.
However, the increasing competition from other cryptocurrencies and the emergence of new technologies, such as central bank digital currencies, could potentially impact the adoption and use of Bitcoin.
Ethereum, on the other hand, has a focus on smart contracts and dApps, which gives it more versatility as a platform. The increasing adoption of Ethereum by developers and the growing popularity of decentralized finance (DeFi) applications are likely to drive the demand for ETH in the future.
However, Ethereum also faces competition from other smart contract platforms, such as Binance Smart Chain and TRON, which could potentially impact its market share.
Overall, it is difficult to predict the exact future of Bitcoin and Ethereum, but both have strong communities and have established themselves as leading cryptocurrencies.
How Many BTC and ETH are Currently in Circulation?
As of January 9, 2023, there are currently 18,716,875 Bitcoin (BTC) in circulation, with a total market capitalization of around $1,141,456,253,665.
As for Ethereum, there are currently 115,242,842 ETH in circulation, with a total market capitalization of around $177,555,470,722.
It is worth noting that the number of Bitcoin and Ethereum in circulation is constantly changing due to various factors, such as mining rewards and token burning. The market capitalization of each cryptocurrency is also subject to fluctuations due to changes in demand and market conditions.
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