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Bitcoin vs Waves: The Differences and Similarities

By Samuel Becker · November 13, 2022 · 4 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

Bitcoin vs Waves: The Differences and Similarities

As the world’s oldest form of crypto, Bitcoin is considered a store of value and a form of payment. Waves, a newer crypto, is more of a groundbreaker in the DeFi space.

Bitcoin was developed as an alternative to traditional currencies and financial channels. Waves, on the other hand, was created to allow users to launch their own applications and digital tokens. If you’re weighing whether to invest in Bitcoin vs. Waves, consider the advantages and disadvantages of each.

What Is Waves (WAVES)?

Waves is an open-source blockchain network that allows users to create and launch custom decentralized applications (dApps) and cryptocurrency tokens.

Blockchain technology processes information using “nodes”: decentralized networks of computers that can drive faster, more secure transactions. Decentralization is a key feature of the crypto realm, which is sometimes referred to as decentralized finance, or DeFi.

Waves works in a similar way to Ethereum, in that the Waves network is typically used to create products that require a high level of security — often relating to finance, personal identification, proprietary data, etc.

Waves has its own decentralized exchange, called DEX, and a native token, WAVES. The token works as a medium of exchange for network users, much like ETH on the Ethereum network.

How Does Waves Work?

Practically speaking, the Waves network is designed so that users with little or no crypto expertise can create digital tokens. All you have to do is fire up the Waves app or web platform and use the network’s token-creation system.

Waves offers users a different approach than similar blockchain networks in that tokens created on the network do not use advanced smart contracts, but rather scripts in user accounts. If you want to get technical, Waves uses a variation of the proof-of-stake consensus mechanism (called “leased” proof of stake) to verify data on the blockchain.

What Is Bitcoin and How Does It Work?

Bitcoin is a virtual currency. Launched in 2009 using blockchain technology, it’s the oldest and largest crypto asset on the market. Bitcoin balances and transaction records are maintained on a public blockchain ledger.

All Bitcoin records, transactions, and ownership data are maintained and verified by a large network of computers around the world through a proof-of-work consensus mechanism. (This is different from the proof-of-stake mechanism that Waves uses.) Through that mechanism, “miners” upkeep the network and are rewarded with Bitcoin.

Bitcoin holders can send each other Bitcoins, assuming they each have a special digital wallet or crypto wallet designed for that purpose, and a private key, which is an address where digital assets are stored.

Because Bitcoin is so popular, some businesses accept Bitcoin in exchange for goods and services — which is not the case for many other cryptocurrencies. In that sense, Bitcoin can be used as a literal currency in some situations.

💡 Recommended: Understanding the Different Types of Cryptocurrency

Comparing Bitcoin vs Waves

By now you may realize that Bitcoin and Waves are intrinsically different. Here are some ways in which the two are similar, and how they differ:

Similarities

The biggest commonality between Bitcoin and Waves is that both have been integral to the growth of the crypto market. Bitcoin was the trailblazer, and its immense growth in value over the past few years attracted attention from all over the investment sphere. But Waves’ ability to give folks with little know-how the tools to launch their own tokens is also generating buzz.

Differences

Bitcoin and Waves differ in key ways. Foremost, Bitcoin is a digital currency, while Waves is a platform for launching tokens. They’re two completely different things.

The two have different goals and aims, too. As noted above, Bitcoin was developed as an alternative to traditional currencies and financial channels. Waves was created to allow users to launch their own applications and digital tokens — even if they don’t know much about crypto.

On a technical level, the two exist on different blockchain networks and use smart contracts in different ways. Because it was designed as a currency, Bitcoin didn’t originally have smart contract functionality. Now, a separate blockchain network called Stacks enables smart contracts for Bitcoin. The Stacks blockchain uses the STX token as a “gas” asset to pay for executing smart contracts.

Smart contracts on the Waves blockchain feature scripts written in Ride, a domain-specific language for developing dApps focusing on security and ease of development. Due to built-in limitations, running Ride scripts doesn’t require any “gas” fees.

Finally, it’s worth pointing out that there is a huge disparity in value between Bitcoin and Waves’ token, WAVES. While Bitcoin has traded at prices exceeding $65,000 in the past, WAVES can be purchased for much less — typically between $4 and $30.

Bitcoin vs. Waves

Bitcoin

Waves

Built on blockchain technology and smart contracts
Integral to the growth of crypto
Functions as a platform
Functions as a virtual currency
Proof-of-stake mechanism
Proof-of-work mechanism

Buying Cryptocurrencies With SoFi

Bitcoin and Waves couldn’t be more different in functionality, underlying technology, and business goals. As the world’s oldest form of crypto, Bitcoin is considered a store of value and a form of payment. It was developed as an alternative to traditional currencies and financial channels.

Waves, on the other hand, was created to allow users to launch their own applications and digital tokens. Waves is more of a groundbreaker in the DeFi space, allowing entrepreneurs with minimal tech knowledge to create crypto products.

Waves and Bitcoin are just two of thousands of crypto assets out there with different and exciting aims, features, and functionality. Whether you’re interested in further exploring how cryptocurrency works, buying Bitcoin or another token, or investing in crypto-related stocks, you can get started using SoFi Invest.

It’s simple when you open an Active Invest account with SoFi Invest. It’s quick and easy, and soon you’ll be ready to trade dozens of different types of cryptocurrency. SoFi doesn’t offer staking or a crypto wallet, but you can trade online 24/7 using SoFi’s secure platform.

Trade crypto and get up to $100 in bitcoin! (Offer is available through 12/31/22; terms apply.)

FAQ

Is Waves crypto legitimate and trustworthy?

Waves has been around since 2016, and its relative longevity in the crypto space is a good indicator of its legitimacy.

How safe is Waves crypto staking?

You can stake digital assets on Waves, which is one reason it attracts many users.

Who created and who owns Waves crypto?

Waves was founded by Sasha Ivanov in 2016, and the company is headquartered in Moscow. Since then, a parent company, Wave Labs, has been established in Miami, FL.


Photo credit: iStock/DjelicS

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