Bitcoin and Ethereum—both leading cryptocurrencies, both loved, loathed, and questioned by many. But how are they different? That is what we will explore today.

Date of Release

Bitcoin is the most recognizable cryptocurrency in the world, and for good reason. It was initially conceptualized in 2008 and launched in 2009, making it the very first cryptocurrency available to be bought, sold, and traded on the internet. Today, you can find it plastered on bright orange ATMs and as an accepted payment method for respected brands such as Microsoft, Newegg, and Overstock.

Ethereum, however, came much later. The Ethereum network was first launched in 2015 and emerged after a number of other altcoins (coins that are not on the Bitcoin network) like Litecoin and the meme-themed Dogecoin. It is now the second-largest digital currency in the crypto world.

Creators

The creator—or creators—of Bitcoin are widely unknown. After creating Bitcoin’s whitepaper under the pen name of Satoshi Nakamoto, whoever was responsible for the concept kept their identity wholly secret. Alas, that does not mean that there haven’t been a number of theories and claims.

In 2016, a man named Craig Wright claimed to be the creator, though in 2019, he said that he worked alongside two others by the names of Dave Kleiman and Hal Finney. Wright has been met with skepticism, as many believe his provided evidence does not confirm a tie to the original whitepaper. Others believed to be Satoshi Nakamoto include crypto enthusiast Nick Szabo and Japanese-American engineer Dorian Prentice Satoshi Nakamoto. Nakamoto’s birth name was, coincidentally, Satoshi Nakamoto, leading to a lot of speculation and confusion in 2014.

Ethereum’s co-founder, contrastingly, is much more open about his contribution to the crypto world. Vitalik Buterin, a Russian-Canadian programmer, had a strong interest in cryptocurrency and even wrote for Bitcoin Magazine until 2014. Buterin, despite his reported wish to step away, has been highly engaged with the Ethereum community since the network’s launch in 2015. Alas, he is not the only creator. The list of Ethereum’s co-founders is long, including active members of the crypto community such as Anthony Di Iorio, Charles Hoskinsin, Amir Chetrit, and Mihai Alisie.

Hard Forks

Bitcoin and Ethereum have both been through various hard forks, a fork in the network creating two different types of cryptocurrency. They may take place for many reasons, including security, coding, or a difference in opinion among developers. While Ethereum and Bitcoin’s most notable hard forks were both highly discussed, they were quite different.

Bitcoin has actually experienced several hard forks, including Bitcoin XT, Bitcoin Unlimited, Bitcoin Cash, and Bitcoin Gold. The most notable of these is Bitcoin Cash, one of the few coins to fork from Bitcoin to remain fairly popular. In this instance, several people in the community believed that Bitcoin no longer lived up to Satoshi Nakamoto’s original concept. To sustain the creator’s vision, they implemented the hard fork for Bitcoin Cash, a cryptocurrency they hoped met the standard of the whitepaper.

The Ethereum fork cannot be explained as simply. In 2016, an organization called The DAO raised a large sum for an Ethereum-focused project, but unfortunately, a hacker exploited the smart contracts holding the funds. The community became divided, trying to determine whether or not they should perform a hard fork to regain the lost coins. In the end, the community performed the fork, splitting the network into Ethereum and Ethereum Classic.

Proof

The Bitcoin network is peer-to-peer, which means it depends on participants to keep it running. These participants are called miners. In exchange for a small amount of bitcoin, miners set up specialized computers to solve difficult cryptographic problems. This method provides proof of work. Bitcoin requires proof of work for blocks—or a group of transactions—to be added to the blockchain by these miners.

Ethereum once used the proof of work model, but has since started transitioning into a proof of stake system. Proof of stake does not require expensive mining computers like proof of work often does, which is why the Ethereum community decided to make this switch. The intended result is to simplify mining and fuel the health of the network.

Scale of Technology

Bitcoin is essentially a currency with no other function. However, it has seen many suggested and implemented advancements, such as SegWit (a measure that makes block sizes larger), and the Mimblewimble protocol (a protocol that increases efficiency and privacy).

Ethereum, on the other hand, was created with other technology in mind. By the use of smart contracts and dApps (decentralized applications), developers are able to use the power of the network to create new projects, including ERC-20 tokens.

Supply

Bitcoin is limited to the creation of 21 million coins. That means that the production of bitcoins will end sometime around 2150, stimulating the cycle of supply and demand: the same concept that makes other goods valuable. For example, oil and gold are worth a lot due to how limited they are in nature. Bitcoins are no different.

Ethereum, on the other hand, has a continuous supply. While it is subject to future slowdowns, coins will continue being made.

Two Very Different Coins

Bitcoin and Ethereum, while they both have their place in the crypto ecosystem, have a number of differences. Bitcoin is the originator; Ethereum is a coin for creatives. Bitcoin utilizes proof of work; Ethereum utilizes smart contracts. Both of these cryptocurrencies have their own uses and communities, and neither will be disappearing any time soon.