That’s how many Americans failed a simple quiz on crypto basics.
In other words, if you asked a room of 25 people about bitcoin and other cryptos…
Only one person in that room would understand what you were talking about.
And baby boomers performed the worst.
Most of the time, they didn’t even attempt to answer the easy questions on the quiz.
Their response was simply: “I don’t know.”
These results, published by CryptoLiteracy.org, should alarm you.
After all, cryptos are transforming the $100 trillion global financial industry…
Yet few people know what they are and how they work.
At Winning Investor Daily, we want to help you become a crypto expert.
So today, I’ll explain the differences between the two biggest cryptos.
The Dawn of Crypto
Let’s start from the beginning…
In January 2009, a person or group named “Satoshi Nakamoto” launched bitcoin.
It was the first cryptocurrency ever. And it introduced the world to the blockchain.
Then in March 2010, an early adopter in Florida paid 10,000 bitcoin for two pizzas.
That was the very first real-world transaction with cryptos.
Five years later, 21-year-old programmer Vitalik Buterin launched a new crypto called Ethereum.
He designed it as a platform for decentralized apps.
Today, bitcoin has a market cap of $381 billion. Ethereum is valued at $132 billion.
Together these two cryptos make up over 50% of the total crypto market.
Bitcoin vs. Ethereum
Now that you have a little bit of background on bitcoin and Ethereum, here are three key differences that set them apart.
1. Limited vs. unlimited supply.
Every four years, the amount of bitcoin that’s created is cut in half.
These events are known as “halvings.”
Eventually bitcoin will reach 21 million coins in circulation.
And that’s it. Once it reaches 21 million in the year 2140, there won’t be any more new coins issued.
Ethereum, on the other hand, doesn’t have a maximum supply.
There are already over 120 million ether out there. And that number is growing.
The amount of ether issued gradually declines over time, though.
And its price will increase as long as demand outpaces supply.
2. Proof of work vs. proof of stake.
Bitcoin relies on a decentralized network of computers to validate transactions.
Participants in this network, called miners, are rewarded with bitcoin.
This process is known as “proof of work.”
Meanwhile, Ethereum is switching to a new system.
In this new process, miners must put their ether holdings at stake.
These miners must validate transactions properly or they risk losing their ether.
That’s why this process is called “proof of stake.”
One key benefit of doing it this way is it’s much more energy-efficient.
Proof of stake uses 99% less electricity than proof of work.
3. Transaction speed.
Right now, bitcoin can only process about five transactions per second.
Ethereum, on the other hand, can do about 30 per second.
So Ethereum is much faster.
But both cryptos are slow compared to other payment methods.
Visa, for example, can handle 1,700 transactions per second.
Just wait for Ethereum’s next upgrade, though.
Soon, it’ll be able to do 100,000 transactions per second.
That’s about 20,000 times faster than bitcoin.
The 7 Best Cryptos to Invest in Today
I hope this article gives you a better understanding of bitcoin and Ethereum.
But ultimately, these are just two out of the thousands of cryptos in existence.
The amount of information out there can seem overwhelming.
That’s why Ian King just did you a HUGE favor…
He sorted through the crypto markets and found the 7 best cryptos to invest in today.
Everything is laid out in detail in his brand-new crypto report.
It’s called: The Next Million: 7 Cryptos for 7-Figure Profits.
Assistant Managing Editor, Banyan Hill Publishing
From open till noon Eastern time.
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