Bitcoin and Ethereum Classic are two of the top proof-of-work (PoW) cryptocurrency projects in the world.
However, they are widely different in design and function. If you’re wondering what the difference is between the two, or which of them to invest in, this guide is for you. We will explore the differences between these two to help you decide which one to use.
We will also highlight the major strengths and weaknesses of the two projects which are important and can affect you as an investor or user. Without further waste of time, let’s get into it.
What Is Bitcoin (BTC)?
Bitcoin (BTC) is the first and currently the biggest cryptocurrency by market capitalization. It was first created as peer-to-peer (P2P) electronic cash that should be used for buying and selling. The network served this purpose for a few years, until it started becoming congested.
The transactions started becoming slower and the transaction fees skyrocketed. This led to a controversy on what should be done to increase the speed and reduce the cost of transactions on the network.
However, Bitcoin’s block size has not increased since, causing transaction speed to remain low and fees to remain high. As a result, the use of Bitcoin as P2P electronic cash doesn’t make much sense, and so alternatives were created.
Bitcoin uses the PoW consensus mechanism, which means coins must be mined. Miners use sophisticated computers to achieve this, and are in return rewarded with new BTC. This is how more BTC comes into circulation.
There are a maximum of 21 million BTC that can ever be mined, and close to 20 million have been mined already. This makes Bitcoin’s supply limited and small, causing it to have more value.
Therefore, investors now consider it to be more of an investment asset than the electronic cash that it was meant to be. Over the years, the value of the asset has gone up several thousand times, making it one of the best performing assets in the world.
What Is Ethereum Classic (ETH)?
Ethereum Classic as the name implies, is a cryptocurrency project that came out of Ethereum. There was a major hack on the Ethereum network, and developers were divided on how the network should function to prevent a repeat of the incident.
Since then, there was a split and Ethereum made changes to its blockchain such as allowing transactions to be altered, while Ethereum Classic continued with the old blockchain rules, including the PoW consensus mechanism.
This means that Ethereum Classic is still mined till today. Miners have to solve mathematical puzzles just as is the case with Bitcoin. However, the network’s main purpose is not for electronic transactions, even though it can be used to send and receive funds.
It supports smart contracts and decentralized applications just like Ethereum. This means that almost anything you can do on Ethereum can be done on Ethereum Classic.
ETC is the native token used to power the network. It is used to pay for transactions and also as a governance token, allowing users to vote on proposals for the development of the network. It is also a popular investment asset.
There are currently 147 million ETC in circulation, with a maximum supply of 210 million. This means there is a lot more ETC to be mined before the maximum supply is reached.
Which Is Better?
If you’re looking for a crypto network you can use for developing and deploying decentralized applications, Ethereum Classic is the network to use here. It provides the required environment for carrying out such developments.
However if your goal is to get an investment asset you can use as a hedge against inflation or as a store of value, Bitcoin is what you should go for. It has a much smaller maximum supply, and has established itself more as an investment asset than Ethereum Classic.
