BTC vs ETH: What Are the Differences?

While there has been no shortage of headlines covering the wild ups and downs of cryptocurrency in 2022, useful information for beginners is often lacking.

When “crypto” gets lumped together under one umbrella, as it so often is in the media, it is too easy to miss the fact that different cryptocurrencies have huge, important differences.

If you’re new to crypto and are wondering “what is BTC?” or “what is ETH?”, we have got you covered. Here are the essential facts you need to know about BTC vs ETH.

What Is Bitcoin?

No cryptocurrency explainer is complete without a BTC guide. Bitcoin (BTC) is, essentially, the “godfather” of cryptocurrencies. It has the largest market cap, is the most well-known, and continues to be the most popular among investors.

Bitcoins are units of digital currency, stored on the blockchain. Founded in 2009, Bitcoin is stored and traded on a decentralized digital ledger.

This means that you can buy and sell Bitcoin without having to go through any central governing authority, as you would have to do with regular fiat currencies. Given its huge popularity, buying Bitcoin is now very easy, as is spending it. You can learn how to buy bitcoin here.

One of the most important BTC tips to remember is that bitcoin tends to be quite volatile, so its value relative to, say, the US Dollar, can fluctuate a lot in a single day. It is also important to note that there is a fixed, finite number of bitcoins that can ever be generated, and this is capped at 21 million.

What is Ethereum?

Now, for the ETH guide. Ethereum is a newer cryptocurrency, launched in 2015, largely as a means of facilitating online transactions. Ethereum is a digital infrastructure that facilitates the use of digital smart contracts.

However, it also produces a token, which is the currency ETH. To some observers, ETH is the second-best cryptocurrency, after bitcoin. It has the second-largest market share and usually has the second-largest market cap of all cryptocurrencies.

When it comes to Ethereum tips, it is worth remembering that ETH is unlimited, unlike bitcoin. This means that its value will never be driven by the number of tokens in circulation.

BTC vs ETH: The Main Differences

Before you start researching BTC and ETH tips for investing, it’s worth keeping the crucial differences between these two major currencies in mind. These are:

  • Bitcoin operates on proof-of-work.
  • Ethereum operates on proof-of-stake.
  • Ethereum is generally more stable and less volatile.
  • Bitcoin consistently has a higher valuation.
  • Bitcoin numbers are capped at 21 million.
  • Ethereum tokens are unlimited.

These are the main differences that a beginner needs to know. Both currencies can widely be bought, sold, and traded via coin exchanges.

As long as you remember the risks inherent in investing in crypto, you are ready to begin your journey!

Informed Investing in 2023 and Beyond

Understanding the differences between BTC vs ETH is essential for informed investing.

If you want to be strategic with your wealth in the year ahead, information is your greatest asset.

For this, we have got you covered. In our dedicated Investing section, you can find useful tips and insights to help you stay one step ahead in 2023 and beyond.

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