BTC and ETH are both digital currencies, but the primary purpose of ether is not to establish itself as an alternative monetary system but to facilitate and monetize the operation of the smart contract, dApps, and any other blockchain solution that can be thought of.
Ether (ETH), the native cryptocurrency of the Ethereum network, is the second most popular digital token after Bitcoin (BTC). As the second-largest cryptocurrency by market capitalization (market cap), comparisons between the two are natural.
Ether and Bitcoin are similar in many ways: Each is a digital currency traded via online exchanges and stored in various types of cryptocurrency wallets. However, there are many significant differences. Bitcoin is designed to provide an alternative to physical or fiat currency; Ethereum is intended for complex smart contracts and decentralized applications, which are believed to be part of the emerging (and theoretical) infrastructure of the future of the internet known as Web3.
Bitcoin
Bitcoin was launched in January 2009. It introduced a novel idea set out in a white paper by the mysterious Satoshi Nakamoto. It introduced Bitcoin as an online currency without any central authority, unlike government-issued currencies. There are no physical coins, only transactions recorded on a cryptographically secured public ledger.
Although Bitcoin was not the first attempt at an online currency of this type, it was the most successful. As a result, it has become known as the predecessor to virtually all cryptocurrencies that have emerged since.
Over the years, the virtual, decentralized currency concept has gained acceptance among regulators and government bodies. Although only formally recognized as a medium of payment or store of value in a few countries, Bitcoin has managed to carve out a niche for itself and continues to co-exist with the financial system despite being regularly scrutinized and debated.
Ethereum
Blockchain technology is being used to create applications that go beyond just enabling a digital currency. Launched in July 2015, Ethereum is the largest and most well-established open-ended decentralized software platform.
Ethereum enables developers to build and deploy smart contracts and decentralized applications (dApps) without downtime, fraud, control, or interference from a third party. To accomplish this, Ethereum comes complete with its own programming language that runs on a blockchain.
The potential applications of the Ethereum virtual machine are wide-ranging using its native cryptographic token, ether (ETH). In fact, Ethereum is being developed to decentralize the Web. How we interact with the Web will not likely change much, but how it operates in the background is being worked on to remove centralized entities using applications developed on Ethereum and blockchains like it.
Key Differences
While both the Bitcoin and Ethereum networks are powered by the principle of distributed ledgers and cryptography, the two differ technically in many ways. For example, transactions on the Ethereum network may contain executable code, while data affixed to Bitcoin network transactions is only used to record transaction information. Other differences include block time (an ETH transaction is confirmed in seconds, compared with minutes for BTC), and their consensus mechanisms are different: Bitcoin uses proof-of-work, while Ethereum uses proof-of-stake.
Is It Better to Buy Ethereum or Bitcoin?
Bitcoin is primarily designed to be an alternative to traditional currencies and, hence, a medium of exchange and store of value. Ethereum is a programmable blockchain that finds application in numerous areas, including DeFi, smart contracts, and NFTs. Which is a better buy depends on your market outlook and investing preferences.
[Source: Investopedia]
