quickie: Bitcoin vs Ethereum

People ask about this a lot these days. Here’s my take on a quick, high-level comparison between these two blockchains.

Bitcoin was designed to be a digital money. Bitcoin has a huge address space, some of which have balances associated with them. These addresses are modified public keys, and the matching private keys are the one and only way to spend whatever Bitcoin there is. Note that “spend” means sending unspent outputs to some other address.

Ethereum was designed to be a full computer, all the nodes of which reach consensus about the state. Since this complexity exists already to save computational state, it saves account balances too. The token is issued in great quantities, which ensures the utility of these tokens but may not make them great stores of value. That utility I referenced is the ability to execute program logic on the network by sending tokens to contracts that cause them to execute code.

Bitcoin has a fixed supply of 21 million tokens, over 16 million of which have been issued. Ethereum does not have a fixed supply; the money supply inflates by around 10% a year currently.

I hinted at it before, but for 95% of the people asking this question are considering whether to invest. They really want to know about the relative strengths of these two as stores of value. Bitcoin is that high-risk, high-upside potential investment they’re looking for, and Ethereum is not as good a fit for their purposes.

Author: chain rat

crawlin around where nobody's lookin, gnawing on the crufty bits

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