In recent months, cryptocurrencies have been a hot topic in the financial and digital industries and beyond. From talk of the potential they hold for the future of currency, to the buzz around blockchain technology and what it could mean for every industry, there’s plenty of attention floating around these new additions. Of course, most will have heard of Bitcoin by this point, but what about Ethereum? With the ‘altcoins’ quickly catching up to their predecessor, understanding just what some of these alternative cryptocurrencies could mean for our industry is just as important as understanding Bitcoin. From the rise in the Ethereum Classic price, to its ability to trade in contracts, Ethereum and Ether aren’t something to be overlooked. Here, we’re taking a look at the differences between Bitcoin and Ether.
What Is Bitcoin?
Bitcoin is undoubtedly at the forefront of the cryptocurrency creation, if not because of its popularity then simply because it was the first cryptocurrency to ever grace the industry. Released to the public in 2009, Bitcoin was crafted by an anonymous entity known only as ‘Satoshi Nakamoto.’ This digital currency was crafted with security and anonymity in mind, built on a decentralised network called a ‘blockchain’. This technology provided a form of ledger that would be hosted across thousands of computers around the world, making it practically impossible to hack or corrupt.
Bitcoin has risen to being worth over $19,000 in the past, and while it sits at around $7,000 today, the rise was proof that this digital currency could prove to be extremely profitable for some in the future.
What is Ether?
Ether is currency used within the more commonly heard of Ethereum, and is used in exchange for apps or services on the platform. The platform for Ether is, of course, the Ethereum platform, which acts as a host for sharing information and making transactions through a blockchain that isn’t too dissimilar to that of Bitcoin. However, Ethereum can trade much more than just transactions – in can trade contracts, and ether acts is the tokens within these contracts.
Smart contracts mean that once one part of the contract happens, the other side will automatically follow, meaning that fraud or hacking are impossible. You can’t get the result without the initial payment – in ether in this case – which prevents the opportunity for the opposite side to fail to follow through on their side of contract.
What Are The Differences?
- The Currency Cap
One of the most notable differences between Ether and Bitcoin is the cap – or rather, lack thereof in Ether’s case. There are only 21million Bitcoins in existence, of which 16.7milion have been mined so far. This means that once they have all been mined, no more can be crafted and the chance of the price stabilising is higher. However, it’s getting much harder to mine coins for this reason. Ether, on the other hand, has 96.4m created, and there are no plans to cap this at any time. However, issuance could slow or step in the future.
- The Speed
Ether is undoubtedly faster than Bitcoin in more than one way. While Bitcoin creates a new block every 10 minutes on average and 12.5 new bitcoins during the same time period, ether is much faster. With 3 new ether every 15 seconds, and a new block in that same time period, transactions and approvals are much faster.
- Smart Contracts
While Bitcoin may be the more popular of the cryptocurrencies due to it’s leading position in the industry, it doesn’t have the capability to work with smart contracts in quite the same way – at least, not on it’s own blockchain. Ethereum, on the other hand, provides the perfect platform for smart contracts, and ether is the token with which people can pay for these contracts or other applications.