Cryptocurrencies are in the top trends witnessed within the last decade. News about Bitcoin, Ethereum and other cryptos are always catchy because it is impossible to avoid the sumptuous benefits and the avenue they create to make money. For a fact, both Bitcoin and Ethereum have made many people rich. But for the average Joe, navigating the multilayered web of Bitcoin vs Ethereum can be very confusing.
Aren’t they basically the same thing? Well, not quite. Bitcoin and Ethereum share similarities, but there are some crucial differences in the cryptocurrencies, their technology and the goals behind their network.
This article breaks it down so even crypto newbies can understand the similarities and differences.
Understanding Bitcoin
Bitcoin (BTC) is built on a decentralized system backed by the Blockchain Network. On the Blockchain, all transactions are recorded publicly on a distributed ledger; it allows peer-to-peer payments without needing a traditional middleman like the banks.
Instead of a central authority like a government or financial institution, transactions are validated and secured by a network of “miners”. These miners use specialized computing equipment to confirm transactions, add blocks to extend the blockchain ledger, and get rewarded in bitcoin for their effort.
The key draw of Bitcoin is its capped limit - only 21 million bitcoins can ever exist. Combined with growing mainstream adoption, this ensures Bitcoin will remain in demand, driving up its real-world value.
Understanding Ethereum
Ethereum also utilizes the Blockchain network, but with bigger ambitions than just decentralized cash transactions. Ethereum (ETH) supports building decentralized apps and smart contracts.
Think of Ethereum like a global computer where anyone can contribute computing resources to its pool or utilize the resources to run applications. These apps leverage self-executing smart contracts, which enable all kinds of possibilities like digital collectibles, games that award crypto tokens, financial platforms without centralized control, and more.
The Ethereum ecosystem revolves around its native Ether token. Beyond powering the underlying blockchain infrastructure, Ether provides the “gas” needed to pay for executing smart contracts. As Ethereum adoption has spread like wildfire, Ether has become a popular asset to invest in or use across apps built on the network.
Bitcoin vs. Ethereum: Key Differences
While Bitcoin vs Ethereum have a few high-level similarities, there are several key differences:
Purpose: Bitcoin aims to function as decentralized digital money - a value storage and payment mechanism that can transmit value across borders. Ethereum provides a broader foundation for a decentralized internet of applications accessed by users across the globe.
Blockchains: Bitcoin has its own established blockchain optimized for BTC transactions. Ethereum allows endless custom blockchains outfitted for specific decentralized apps.
Consensus: Bitcoin relies on Proof-of-Work where miners use brute computing force to verify transactions. Ethereum is transitioning to a more efficient Proof-of-Stake consensus requiring staked tokens instead.
Supply: 21 million BTC supply cap forever - as rarity keeps value up! No hard limit for Ether but much is already circulating so increased demand matters more.
Speed/Fees: Bitcoin is still slow, taking about 5 minutes for a transaction with fees spiking during high volume. Ethereum is faster at about 15 second blocks although popularity leads to congestion at times.
Converting Bitcoin or Ethereum to Local Currency
With crypto exploding locally, Nigerians are looking for options that allow them to convert crypto to Naira without hassles. Leading exchanges like FlipEx allow the simple conversion of Crypto to Naira without encumbrances to users who wish to cash out their Naira.
The process is pretty easy. Just deposit BTC or ETH from another wallet into the FlipEx exchange, select the desired currency pair, enter your trade details, and withdraw the converted Naira to your bank.
How to Convert Bitcoin or Ethereum to Naira on FlipEx
Here's how to convert Bitcoin (BTC) or Ethereum to Naira on FlipEx:
1. Create a FlipEx account and finish identity verification. First you have to download the FlipEx App from either Google Play Store or Apple App Store
2. Deposit BTC or ETH from another crypto wallet into your FlipEx wallet.
3. Check the BTC/NGN or ETH/NGN exchange rate.
4. Input amount of crypto to trade and preview estimated naira proceeds.
5. Execute trade by selecting "Sell" BTC or ETH to convert to NGN.
6. Withdraw your naira to your connected Nigerian bank!
Bitcoin vs Ethereum - FAQs
Here are some common questions comparing Bitcoin and Ethereum:
Can smart contracts be created for Bitcoin like on Ethereum?
Nope - custom smart contracts are an Ethereum specialty!
What are the market caps - how much money is in each network?
Bitcoin tops out around $325 billion market cap, with Ethereum trailing at $180 billion - but gaining fast!
Which has performed better for investors?
Broadly Bitcoin has seen larger gains percentage-wise so far. But Ethereum launched years later and has already made many early adopters millionaires.
Can either crypto lose relevance or collapse?
In theory yes, but growing real world usage makes this less likely over time. Still, crypto glory isn't guaranteed for pioneering networks.
How fast can either BTC or ETH process transactions?
Bitcoin still struggles at 5 transactions per second while Ethereum can handle 15 transactions per second currently. Upgraded versions of Ethereum like Polygon achieve much faster speeds.
Conclusion
To wrap it up, while Bitcoin and Ethereum have similarities as pioneering cryptocurrency networks, they serve different purposes. Bitcoin excels as scarce digital money transmitting value without borders. Ethereum provides a feature-packed platform for decentralized apps - enabling a blockchain-based computing revolution through innovations like smart contracts.
Both cryptos have already delivered massive investment wins. Bitcoin appeals to investors focused purely on store of value and long-term gains. Ethereum offers additional real-world application potential that has captured the imaginations of developers, companies and ordinary users alike.
The bottom line? Bitcoin is the big brother of all cryptos more like digital gold. But Ethereum is catching up with diverse functionality powering Web3 visions. There is room for both at the top. Whether you are after investment returns or interested in crypto’s future possibilities, it pays to understand the key differences between these top blockchain networks.