As investment vehicles, they each have their own merits and downsides. That’s why many traders like to hold both Bitcoin and Ethereum. A 2022 report from Morgan Stanley noted that Ethereum was more volatile than Bitcoin in the period from 2018 through 2021, experiencing 30% more volatility during this time. Factors like the concentration of ETH in fewer wallets and the release of initial coin offerings (ICOs) built on the Ethereum network may have contributed to its volatility. Considering the dominance of both Bitcoin and Ethereum, it’s only natural to compare and contrast them.
And unlike fiat money, Bitcoin isn’t backed by a government or central bank. Until this cap is reached, new Bitcoins enter circulation every 10 minutes. The real identity of Bitcoin’s developer, known as ‘Satoshi Nakamoto’, remains a mystery to this date.
Bitcoin is more valuable and is seen as a more reliable investment, but Ethereum has lower transaction fees and allows for the creation of decentralized applications. Another thing you’ll do with Ethereum and Bitcoin is to pay network fees. Any time you carry out a transaction with either cryptocurrency, you’ll be charged an amount that helps pay for the network’s technology. These fees can sometimes come on top of whatever fee you might be paying to the crypto platform or payment provider you’re using. Ethereum is designed explicitly for payments on the Ethereum network. However, unlike traditional fiat currencies such as the US dollar, it is based on a decentralized network, which means that it is not controlled by any government or financial institution.
In another example, Ethereum is also home to the top decentralized exchanges. The more crypto someone stakes, the greater their chances of being chosen to validate a block of transactions to a blockchain and earning a set amount of crypto. The system also discourages bad actors with financial penalties. A major criticism of proof of work is that it is highly energy-intensive because of the computational power required. Bitcoin is a cryptocurrency that can be used to buy goods and services, whereas Ethereum is a decentralized platform that runs smart contracts. Ethereum, on the other hand, is a platform that allows for the creation of decentralized applications.
Bitcoin was envisaged as a means of avoiding many of the problems inherent in the modern system of money, such as the concentration of power into the hands of middlemen. Cryptocurrencies are famously volatile, in part because of the self-reinforcing effect that their popularity can have. When the price of bitcoin rises, the demand for it surges, which pushes the price up even further.
Proof-of-work-systems devour a tremendous amount of electricity. Bitcoin mining, for example, currently consumes electricity at an annualized rate of 127 terawatt-hours (TWh). That’s now higher than the power consumption of the entire country of Norway.
Our editorial team, comprised of more than 20 professionals in the crypto space, works diligently to uphold the highest standards of journalism and ethics. We follow strict editorial guidelines to ensure the https://www.tokenexus.com/bitcoin-vs-ethereum/ integrity and credibility of our content. According to the Bitcoin vs Ethereum chart, 1 BTC is currently worth 18.45 ETH. This Bitcoin to Ethereum ratio will rise and fall based on broader market conditions.
However, from their premise to price differences, the two concepts are very different. The performance of BTC and ETH often serves as a benchmark to gauge the overall health of the crypto market. Despite their dominance, these cryptos function very differently from one another. Though it has not achieved broad adoption as a form of payment, Bitcoin has become a popular — and volatile — investment that is now even offered in some retirement plans. Our partners cannot pay us to guarantee favorable reviews of their products or services. Bitcoin and Ethereum are very different blockchains, but both are available for purchase on eToro and Exodus.
