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Bitcoin Vs Ethereum – What’s the Difference?

Bitcoin Vs Ethereum – What’s the Difference?

Posted on September 20, 2022September 20, 2022 By Mmadu Abuchi

Bitcoin and Ethereum are both digital currencies, but they operate on different platforms. While Bitcoin is a currency, Ethereum is a software platform with its own digital currency called Ether. It was launched in 2015 and enables the creation of Distributed Applications and Smart Contracts.

Proof of Work

Ethereum is similar to Bitcoin in many ways, including its peer-to-peer payments and ability to create smart contracts. These contracts are made to run when a predefined set of rules is met. Ethereum has a wide range of applications, and it’s powered by its native cryptographic token, ether. The platform recently held a presale to sell ether, which developers can use to build applications. Unlike Bitcoin, which relies on mining, Ethereum uses proof-of-stake instead, which substitutes computational power with staking. In other words, it replaces miners with validators who stake their cryptocurrency holdings to activate the ability to create new blocks.

Proof-of-stake is a more secure system, which also requires significantly less energy and mining hardware. Its goal is to reduce energy consumption by eliminating the need for miners to solve complex mathematical equations. In addition, it reduces transaction times and relies on miners being trustworthy. If one group of miners gains 50% of the control of the network, it can prevent all transactions from being confirmed or double spend coins.

Market sentiment

The recent rally in the market for bitcoin and Ethereum has raised investor interest. Both cryptocurrencies are gaining market share and traders are increasingly buying them during dips. However, the cryptocurrencies are still very volatile, making it difficult to accurately predict prices even within the next few hours. This also makes it difficult to make long-term predictions.

Over the past week, sentiment in most cryptocurrencies has improved, according to market sentiment analysis service Omenics. The 7-day moving average of the sentscore for the top 10 coins rose to 5.41, compared to 5.16 last Monday. Bitcoin and ETH both saw their sentscore go up by about 0.3 points each over the past week.

The price of both cryptocurrencies had gained momentum, reaching new two-month highs. However, this positive market sentiment was short-lived, as the Fear & Greed Index (FGI) was pushed closer to greed.

Potential applications

Blockchain technology and cryptocurrencies like Bitcoin and Ethereum can be used in various industries, increasing efficiency and trust. They can also be used to democratize access to services. One example is in the music industry, where they can be used to manage royalties. By using Ethereum, music creators can distribute tokens that represent their ownership rights. Projects involved in this area include Ujo, Mediachain, and the Open Music Initiative.

Although both Bitcoin and Ethereum are widely used as digital currencies, they are not directly competitive with each other. They are based on different principles. Bitcoin is intended to be used as a medium of exchange, while Ethereum is designed as a general-purpose blockchain that can be used to perform limitless functions through smart contracts. Both have their pros and cons.

Ethereum’s main advantage is its ability to serve as the base protocol of various decentralized applications. This makes it a valuable addition to any investment portfolio.

Price

When comparing the price of Bitcoin and Ethereum, investors should consider the different uses for each currency. In the case of Bitcoin, investors can think of it as a non-sovereign currency and a store of value. For Ethereum, the value comes from decentralization, security, and proof-of-work mining.

The price of both coins depends on the total supply. When there is less supply, the price will increase. Similarly, the prices will go down if the supply is increased. As of now, Bitcoin is the most popular cryptocurrency globally, with the highest market cap. Ethereum, on the other hand, is the second-most-valuable cryptocurrency in the market.

Ethereum appears to have bottomed out, as its use cases have expanded. Additionally, it is about to transition to Proof-of-Stake in September. This event could be the catalyst that makes Ether a world-class asset.

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