#BTCvsETH
Bitcoin (BTC) and Ethereum (ETH) are two distinct cryptocurrencies with different purposes and characteristics.
*Key Differences:*
- *Purpose:*
- *Bitcoin*: Designed as a decentralized peer-to-peer digital cash system, often referred to as "digital gold". Its primary use case is as a store of value and medium of exchange.
- *Ethereum*: A programmable blockchain that enables smart contracts and decentralized applications (dApps), making it a global computer for decentralized solutions beyond payments.
- *Consensus Mechanism:*
- *Bitcoin*: Uses Proof of Work (PoW), a method that requires miners to solve complex mathematical puzzles to validate transactions and secure the network.
- *Ethereum*: Transitioned to Proof of Stake (PoS) in 2022, which significantly reduces energy consumption by requiring validators to hold and stake ETH rather than solve computational problems.
- *Scalability:*
- *Bitcoin*: Processes about 5-7 transactions per second (TPS) with a block time of approximately 10 minutes.
- *Ethereum*: Processes around 30 TPS with a block time of 12-14 seconds, and plans to improve scalability through upgrades like Pectra and sharding.
- *Supply:*
- *Bitcoin*: Has a fixed supply of 21 million coins, making it a deflationary asset.
- *Ethereum*: Does not have a fixed supply, but recent updates like EIP-1559 introduced a burn mechanism that removes ETH from circulation, partially offsetting inflation.¹
*Investment Perspective:*
Both Bitcoin and Ethereum are solid long-term investments, but they cater to different investment goals and risk tolerance. Bitcoin is a stable store of value, while Ethereum's focus on smart contracts and dApps makes it a hub for innovation and potential growth.
*Current Market Performance:*
Bitcoin's market capitalization is around $1.9 trillion, while Ethereum's is around $400 billion. Bitcoin's price has been increasing, with some sources reporting a 6.81% surge in the last 24 hours. Ethereum's price has also risen, with a 91% gain in the past year.
