Estimated reading time: 1 minute, 51 seconds
Wondering about the difference between Bitcoin and Ethereum? Get the answer with our resident expert, Taylor Gerring. Taylor dives into the two most prevalent blockchains, Ethereum and Bitcoin and the unique functions and purposes of each platform.
Additionally, Taylor explores the scaling issues that both blockchains are facing or will face in the future.
Check out our video and the script below! And don’t forget to check out the other “Ask an Expert’s”!
What’s the difference between Bitcoin and Ethereum?
As you may know by now, Bitcoin with the first and original cryptocurrency. Several years passed before other blockchains came about. One of the first was Litecoin. Today, one of the most popular next-generation blockchain projects is Ethereum. Ethereum allows for value transfer online. However, their main goal is to comprise the backbone of an improved internet, called “web3“.
Does that make Bitcoin irrelevant?
No, Bitcoin is designed to be used as a currency or store of value. Ethereum is a world computer designed to run smart contracts. There many tokens used in different networks which do different things.
So, should I hold both bitcoin and ethereum tokens?
Diversification is always good from an investment standpoint. Beyond that, it’s a bit like rooting for a team or belonging to a group. Each has its benefits and drawbacks. When you own a token, you become part of that network and ecosystem.
What’s the next step for Bitcoin?
Bitcoin has been discussing a ways to continue growing their network. Currently, the transactions completely fill blocks, and a queued backlog stifles the network. The cost of sending transactions has increased, making some uses impractical or too expensive. So, some have called for Bitcoin to transition to a store of value instead of “peer-to-peer digital currency”. It’s impossible to know what will happen next, but the conversation is constantly evolving.
Does Ethereum have similar scaling concerns?
Yes, all blockchains today have some concern of scaling. This is because of the requirement that all nodes process all transactions. If we can solve that problem blockchains have good chance of maintaining consistency across a large network of users.