WadzPay users can send, receive and store cryptocurrencies including Bitcoin and Ethereum on the WadzPay App. As much as our users may enjoy these top two crypto products, many do not really understand the difference between Bitcoin and Ethereum — apart from their prices.
Bitcoin and Ethereum were developed for quite different reasons. Let’s find out about each of these two biggest cryptocurrencies (by market capitalisation):
Back in January 2009, a white paper emerged made by Satoshi Nakamoto about Bitcoin. Bitcoin is able to provide a secure online currency without the need of any central authority, unlike National currencies that needs to be issued by the government.
There are no physical Bitcoins. This virtual and decentralised currency only shows balances associated with a cryptographically secured public ledger. Over time, Bitcoin has gained more acceptance among government bodies and regulators. However, as a disruptor, Bitcoin has been regularly debated and scrutinised.
After more than a decade of its existence, Bitcoin’s supply is still limited to only 21 million. It is now known as digital gold. Both institutional and retail investors are now rushing to own own this limited supply of Bitcoin. With this influx of demand, Bitcoin’s value keeps climbing, as it reached US$58,640 as its All-Time-High (current at March 9, 2021).
It’s hard to beat Bitcoin’s dominance, as there will be Bitcoin halving, which cuts the pace of Bitcoin creation in half every 210,000 block of transactions. The last time of Bitcoin halving happened was in in May 2020, and at the current pace, people can expect the next halving to occur in 2024.
Ethereum has different motivations than Bitcoin. They want to go beyond a mere digital currency. Released in July 2015, Ethereum builds the currently largest open-ended decentralised software platform. Thus, so many cryptocurrency tokens are issued using the Ethereum network.
Ethereum enables the deployment of decentralised apps (dApps) and smart contracts to be built and run without any control, downtime, fraud or interference from a third party. Developers are able to build and run distributed applications, as Ethereum offers its own programming language which runs on a blockchain.
Everyone in the world can use ETH to make payments, as a store of value, or as collateral. If Bitcoin is like gold, then Ethereum is like electricity.
Ethereum is an infrastructure, with possibly limitless of more development. As we can see today, the growth of decentralised finance (DeFi) is another extremely bullish catalyst for Ethereum.
All in all, Bitcoin and Ethereum should not be viewed as competitors. They have different purposes. Bitcoin can be an alternative to national currencies, a store of value, and a medium of exchange. While Ethereum was intended to be a platform to facilitate programmatic contracts and applications through its own currency.