Topic: Know your facts: Fundamental differences between Bitcoin and Ethereum (Read 215 times)

Very true and main reason of it boils down to PoW vs. PoS.
Quite contrary to PoS, PoW is very hard or almost impossible to compromise. Not so for PoS, where more attack vectors can be found.
For example, PoS can be abused by rich stakers. Many PoS projects have a so-called pre-mining of coins allocated to the team and the team can abuse such pre-mined coins to gain influence about project decisions.
A large pre-mine is making a project centralized in many ways and devs can gain much influence by staking a large amount of PoS coins. PoW is not having such issues.

A similar problem is called “nothing at stake”, where attackers benefit from no cost to stake ETH or similar PoS coins. Should a fork occur, no matter if the fork is a friendly, accidental or a malicious attempt to rewrite history and reverse transactions, it’s a given strategy for any staker to stake on every chain. By doing so, he will get a reward no matter which fork will succeed and he will have no additional cost to do so.
In PoW, such a problem is not happening because PoW always means work (spending electricity) needs to be done. A cost occurs for every miner.

The main difference is that bitcoin is completely decentralized while ethereum isn't.
Bitcoin transaction fees is usually cheaper than ethereum but on the other hand ethereum transactions are validated faster than bitcoin.
Both the coins are different from each other and have their own supporters and haters but can coexist in crypto.

Not necessarily. We have meme coins with no utility that has been traded for several years. The crypto market besides bitcoin has a $900 billion dollar market cap while over 90% of the altcoins do not have utility.

As long as there is a market and traders who want profit, a coin with no utility can flourish.

- Jay -

Since then other cases similar to DAO happened, some of which were in millions of dollars. They never rolled back those!
The best course of action would have been to hard fork and fix the bug in the protocol to prevent future DAOs from happening instead of just getting their own money back.

When you are comparing the returns, look at the bigger picture like return per year over last 10 years and not sort based on last 24 hours returns. Because, there is manipulation by whales in small coins.

I do agree that utility of the coin is also very important but that is also directly related to returns. If a coin is really that useful, the returns will be good over a period of time. For useless coins, they may spike temporarily but over  a longer period of time, the value will come to almost zero.

Well, Ethereum has an ICO^[1] so of course they had to premine some coins in exchange for the invested funds that went into building of the chain. The Ethereum DAO hard fork was the right way to go about it especially since the technology was immature and things went wrong. The best course of action was to fork the chain and render the stolen ETH tokens to become invalid. Since then, their network have become more resilient to attacks.

Once the miners agreed the hard fork was the way to go, they made it happen. Being a POS chain now doesn't make it much different since entities that Stake can vote for network consensus.



Reference: https://icodrops.com/ethereum/

I don't think Ethereum is to blame for the fact that it seems the price movements of Ethereum is in line with that of Bitcoin, the crypto-currency market mainly shift according to the price movement of Bitcoin.
Ethereum is an altcoin and in my own opinion it's the best alternative for Bitcoin and it has had that throne for a long time. My only issue with Ethereum is that it's transaction fee are very high.

Bitcoin is safer and more decentralized, but Ethereum is also a very big project, so I'm sure they're watching out for security risks, too. Also, Ethereum transaction fee is around $1, much lower than what Bitcoin transaction fee has been lately. To many people, this can be an important point when making a choice. As for potential of growth, it seems to me that Ethereum roughly matches BTC ups and downs and does so at a similar proportion (Ethereum is currently 52% below ATH, and Bitcoin is 39% below ATH, but it's close enough). That means Ethereum is a decent investment option, even if not the best one.

i agree with this point. ethereum is like a shadow that follows bitcoin. just look at how when the price of bitcoin rises, the price of ethereum and other altcoins will also be affected by the increase. and once the price of bitcoin goes down, ethereum also goes down. from this alone it shows that ethereum does not have a strong economy like bitcoin has, where it is still based on bitcoin price fluctuations. i can even say that bnb has a stronger economy compared to ethereum, even though these two types of altcoins are still equally affected when the price of bitcoin falls, but bnb is still better.

Ethereum blockchain was rolled back by Vitalik and his team after the DAO hack.

Changpeng Zao and Binance wanted to roll back the Bitcoin blockchain after their exchange was hacked. Smh.

History is filled with these so called "first movers" that no longer exist.
Apart from the fact that Bitcoin was not the first attempt at creating a digital currency like this, I've to say the reason for Bitcoin's success is that it works as it should! The reason is actually that simple. Bitcoin was supposed to be a decentralized censorship resistant payment system and with all its shortcomings (like the fee spikes) it does do exactly that.

In other words if something new came along that worked as it promised and solved the issues Bitcoin faces, it would easily replace Bitcoin; just like that. The reason why nothing has come close is because each new project we see is either created to be pumped and dumped or is not doing what they promise.

Take Ethereum for example. It was supposed to be a decentralized and immutable smart contract platform without bugs. And it is none of that!
The only reason why it has not died yet is because it has become a gamblers' paradise where newbies go to get scammed by token creators on a centralized and bug filled platform.

Ethereum is created for other purpose which Bitcoin doesn't have like the speed of transactions getting confirmed and more. Well, there are other things that Ethereum doesn't have where Bitcoin have like being decentralized. You can say both have disadvantages and advantages between the two. Since the Ethereum created then many people used it when they know that the transaction getting confirmed isn't slow that's why it is now used by many people and became the alternative of Bitcoin or altcoin.

Or in terms of Quarterly returns , anyone can check this graph here:



https://www.coinglass.com/today

And obviously, we know how centralized ETH right now when they moved to PoS, so that is the big difference right now as BTC remain PoW.  I doubt that devs are going to switch to that validating model.

And with the current situation of the network of Bitcoin now, there are suggestions that Bitcoin should transition the same as Ethereum from PoS to PoW.

No thanks.

It's not all about the current fees that we have although it's actually a serious matter now. But if we are to choose, definitely we will choose to maintain its security.

Bitcoin is the first digital cryptocurrency and every other cryptocurrencies are regarded as a carbon copy, some called them alts, bitcoin make use of transaction fee while altcoins make use of gas fee, bitcoin is PoW while ethereum is PoS, there are many things to compare and contrast the two of them together with, but for now, what gives the solution to what the people want is bitcoin and not ethereum.

when ethereum reached its ATH in may 2021 it then shadow pegged itself 99% of the time to blindly just follow bitcoins market(only varying to slowly lose price pegging)

you can see it by its near flatline comparison to bitcoin after may 2021 compared to its independent variation pre may 2021


looking at bitcoin vs ethereum

you can see the wiggles look similar where ethereum only deviates by ~1% a month time slowly gapping  away from bitcoin peg as ethereum drops down from its premium

like the first chart was only 12 eth per btc now 18 eth per btc over the 2.5 year period
meaning it deviates by 0.03% a day on average of those 2.5 years (~1% a month)

where by before may 2021 ethereums wiggles deviated alot from bitcoin on a daily bases

all of this shows that ethereum does not have its own independent market/sentiment/utility. and is instead just copying bitcoin and slowly losing peg over time.. which would continue and could make ethereum drop to $50 if things went very wrong

Ethereum unlike Bitcoin is centralized with individuals with the biggest gun having control over the currency.

Another reason would be the infinite supply and malleability  of Ethereum supply, the central authority can choose to produce more or burn more through gas fee.

The biggest difference comes from why they were created. Bitcoin was created to correct the flaws of traditional money system  while Ethereum trying to find its place created an Haven to create Shit coins.  
Shiba inu has risen more than dollar
Does that mean it's better?

First mover advantage. You can't defeat a founder that came out with a bang accompanied by huge followers. Bitcoin sets the pace, others just has to follow. But Ethereum success stems from the fact it created its own niche.

Uses and potential they ain't, but they are as an investment.

Ethereum isn't competing with Bitcoin at all. They can coexist and help each other thrive.

Bitcoin and Ethereum are the top two cryptocurrencies as of now occupying the top two spots of the largest market capitalizations they are often considered to be the most safest investments in the crypto world

However even with impressive performance and growth over the years, ethereum can not still surpass bitcoin be it due to its security or utility bitcoin is miles away further than ethereum

There are still advantages that ethereum has over bitcoin like having faster transactions however its gas fees are much more costly than bitcoin’s already high transaction fees

Returns are not reliable figures to determine which coin is better than the other. In the case of bitcoin where it has happened over several years and at a reliable rate, one can maybe use it as a yardstick, but do not use it for smaller coins which can boost by 300% or more within a few hours.

Utility is the real benefit of any asset and the security of that asset

- Jay -

They built Ethereum like that because they wanted to be different to bitcoin and so they end up with those incidents, thank God and Satoshi that I wasn't influenced by my friends to do those DAO at that time because I would've been in a confusing place in cryptospace if I did, that's also a scary thing for Eth to have some sort of reset button in the cases that the whales weren't able to do what they wanted to do. That's a red flag already as to why you shouldn't put your bitcoins in Eth, you're going to regret it when there's a possibility that the roll back can happen again.

ethereum does not have much of its own independent utility/economy.
due to the observable fact that ethereum shadow follows bitcoin movements shows that there is no real independent market speculation on ethereum
if people used/valued ethereum for ethereum utility the market wiggles of ethereum would be different wiggles/trajectories compared to bitcoin

but the fact that ethereum shadows bitcoin shows ethereum doesnt have its own utility speculation

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due to staking, the underlying cpu cost of validating signing and accepting of blocks for ethereum calculates at ~<$50 per eth
however bitcoins underlying cost at the most efficient majority starts at $25k

this give bitcoin a good underlying value support that make majority not want to sell btc below $25k bitcoin is at a healthy 1.7x above value

yet ethereum due to lack of ethereums own speculation economy, has a pumped market 47x higher than its underlying cost value

Another two major difference is the centralization of Ethereum and the fact that the centralized authority has abused its power in the past to effectively nullify mutability of Ethereum blockchain when they decided to roll back blocks to get back the money they'd lost in the bet they made on DAO without even fixing the protocol's flaw that led to the problem in first place.

The other is the huge premine that Ethereum had. While Bitcoin has no premine and every single satoshi is created fair and square, the Ethereum is not the same. They premined tens of millions of it before releasing the project.

The benefits of BTC over Ethereum are reflected in returns these coins offer.

It is very well explained in this article

https://blockworks.co/news/bitcoin-eclipse-ethereum-returns

As mentioned in this article, Ethereum was launched in 2015 and it has increased by 66,544%  from its initial price.

On the other hand, BTC was $0.00076392 in 2009. From there, it has increased to 4-billion percent.

Almost impossible for ETH to catch this growth ever.

Earlier, I have had a much more positive view about Altcoins but when reviewing opinions of computer scientists, coders and developers, it looks like Ethereum can’t compete against Bitcoin at all.


In an earlier topic I’ve already listed important characteristics why Bitcoin is an advanced and safe coin:


1. Bitcoin is well reviewed

When Bitcoin was invented, it was set up to be a big security. Hacks should be impossible and get prevented by good code. Bitcoin attracted and still has a very large community of really educated developers.
Bitcoin has a very reliable coder community, where flaws will be detected early before implementation and no risks are being taken. Many much smaller coins have a very flawed code review process.
A large and educated coder community reviewing code during testing times is an important advantage for Bitcoin.

And luckily, it saves us from possible hacks, when hackers are prevented from detecting flaws faster because all flaws are removed before implementation.
We have seen so many hacks, where a flawed code was exploited and people lost money, like for Altcoin cross chain bridges recently or when Terra Luna failed.
Still, people are buying coins from unreliable coders like Tron from Justin Sun or even weaker DeFi coins like Acala Stablecoin from Polkadot’s supplier Web 3.
Unfortunately, some people will only learn after a loss.

Some coins are very centralized and have a single point of failure like Solana, when it was down several times or devs have much power like in Binance Coin or Tron.
And DeFi coins can easily print some more coins / tokens into existence.
Bitcoin is having a big advantage here.



2. Bitcoin has PoW

It is big controversy for a long time, if a coin makes PoW or PoS, like it was for Ethereum [ETH]. Not for Bitcoin because Bitcoin developers have decided PoW is best because of security. From what Experts have said so far, PoW is very hard or almost impossible to compromise instead of PoS, where more attack vectors can be found. Like Corona, we should trust mayority of experts who have education and experience in an issue. Satoshi implemented PoW not PoS because Satoshi knew. He was very experienced and called it right.
PoS can be abused by rich stakers and makes a project centralized in many ways like premined coins and devs can create much influence by staking a large amount of PoS coins. PoW is not having such issues.




3. Security is Bitcoin’s priority

As for a safe cryptocurrency, security standards are very important. First point, we need security standards and Satoshi implemented it right himself, when he developed Bitcoin. Early Bitcoin developers added more security standards. Second point is after some time, to NOT remove such security standards. First point and especially second point are relevant to many Altcoins, which is a big issue for Altcoins.
Many Altcoins don’t offer anymore to create private and public keys to prove ownership of funds and access it. It is very concerning and seems mind blowing to many experienced coders.
For example, when creating a Solana wallet or similar new Altcoins. Altcoin developers are not focussing on security.
Or even MEW is bitching around more and more every time going away by implementing insecure patches. We need to have our private key offline.
Many Altcoins are leaving people vulnerable which is very concerning.
Bitcoin is better like Electrum for example. Its design is not so nice but Electrum is good tech and recommended by many experts.

Bitcoin is still having very high security standards today because of Bitcoin does not want to build a hype coin, Bitcoin wants to build a safe coin.
It is our duty to select a safe coin instead of an unsafe hype coin.

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But now, a direct comparison to Ethereum should be drawn because it’s also always an opportunity when someone has bought Ethereum (or a different Altcoin) and he wants to have arguments for or against each coin in direct comparison.
In such cases, it is all about an accurate research and argument and also for education for us to really know a fact about fundamental differences between Bitcoin and Ethereum to get a direct comparison.
Maybe experienced members can elaborate a list of valid arguments, especially for such points, when comparing Bitcoin’s and Ethereum’s fundamentals:
- developers of Ethereum have too much power
- nodes and miners in Bitcoin vs. nodes and miners in Ethereum
- Ethereum code changes can be done much easier compared to Bitcoin
- Ethereum history vs. Bitcoin history (which coin is more stablished)
 + more points of importance


When someone is asking me or I need to explain and compare fundamental differences between Bitcoin and Ethereum, I would be happy to give a good explanation, why Ethereum can’t compete against Bitcoin.
I’ll be happy to see your answers, read and review it.