What to Read Next
As you enter the new and exciting world of crypto, one of the first things you will ask yourself will be about the differences between Ethereum vs Bitcoin. You may think of Bitcoin and Ethereum, as a lot of us do, as Apple and Microsoft of crypto. However, unlike Apple and Microsoft, they are completely different from one another. Both have very different objectives in mind.
In fact, other cryptocurrencies compare a lot closer to Bitcoin and Ethereum than Bitcoin and Ethereum compare to each other. When you look at Ethereum vs Bitcoin, you can see that their goals are largely different. So, besides statistics, how exactly do Bitcoin and Ethereum match up? Many beginners in cryptocurrency believe that Ethereum is only as a financial currency, like Bitcoin. Here I will look at some of the features and facts of Bitcoin and Ethereum.
This is the easiest way to understand and remember the primary difference between Bitcoin and Ethereum! Their purposes Bitcoin is a store of value and a way to send money to someone. Ethereum is also a way to send money to someone but only when certain things happen. These values can be things other than digital currencies, making it different from Bitcoin. Their coin supply Bitcoin is limited to 21,, coins. This creates supply and demand, which is healthy for a store of value. Ethereum, however, is not limited.
The production of Ether is continuous. The supply of Ether will slow down a lot over time though. Their ages Ethereum is 6 years newer than Bitcoin and is further advanced. Ethereum vs Bitcoin, well both are of course decentralized. If something is decentralized, it is not in one central position. Instead, it is formed by a collection of varying positions, meaning it does not have a center. They run via Facebook and Facebook only.
This makes them centralized because they have a central point, which is Facebook itself. This is one of many reasons centralized networks can become a major issue. As you could imagine, right? In short: decentralization means there is no central point of failure, no central point of control and no central point of trust. This is why many agree that decentralized networks are the future!
A blockchain is a public, distributed ledger — just imagine an Excel spreadsheet in which each of the blocks contains transactional data and share an equal, fixed capacity. The ledger continues to grow and grow as more blocks add.
The blocks add up chronologically by using cryptographic techniques. Cryptographic techniques that ensure that blocks cannot reverse. Sorry hackers…. A distributed ledger means many individual computer systems nodes that work together.
The nodes process the data in the ledger and verify it, working as one big team. This way, it is impossible for a fake transaction to be verified, as it would need the consensus the group agreement of the blockchain.
Distributed ledger stores the verified blocks. It is shareable and downloadable by all other nodes on the network. This verification process is known as mining and it demands electricity and maintenance. This is the foundation of a typical cryptocurrency ecosystem. The exact number of Bitcoin nodes is unknown, but some sources estimate it to be upwards of ,! Imagine trying to hack half of that! For more on blockchain technology, check out our Blockchain Explained guide.
Smart contracts are a decentralized tool. In the Ethereum vs Bitcoin battle, Ethereum was the one who introduced smart contracts to the world. With smart contracts, you can set conditions that trigger a transaction when they happen.
As the smart contracts on Ethereum are powered by the blockchain, developers can create applications that never go offline and cannot be edited by third parties. Imagine if we had this power with the regular contracts we currently use as part of our everyday lives! A good way to think of smart contracts is to imagine purchasing a house. Usually, this process requires third parties, such as a lawyer and a broker. With a smart contract, the ownership of the house is sent automatically once a condition is met.
It looks something like this: John transfers ETH. The payment gets verified and he gets the ownership of the house. This is applicable to many different scenarios. Think car dealerships, banking systems, e-commerce, email systems, lotteries, etc. This is why the possibilities with building on Ethereum are endless. Bitcoin and Ethereum have very different purposes!
It provides users with a platform and programming language to build the applications on. It serves as a decentralized store of value — a peer-to-peer digital currency, used for financial transactions. It eliminates the need for third parties in payment technology. In conclusion, the primary differences that separate Ethereum vs Bitcoin are their purposes and their concepts.
Bitcoin has a lower coin supply and is more liquid than Ethereum, but Ethereum has better technology and provides more uses than Bitcoin does. Based on the fact Ethereum has more use cases than Bitcoin — and therefore serves a bigger purpose — I can say that it is indeed an overall better Bitcoin alternative.
It just means that because they are more similar to Bitcoin, one of them may be the best Bitcoin alternative. Blockchain technology is still in its early years. However, Ethereum is currently the clear winner. Instead, it runs alongside it as it pursues a different objective.
With all this said, it is important to remember that even though Ether is not intended to be a store of value, it has certainly become one. Here are some examples of everyday life:. So as the market currently stands, yes, there is definitely room for both to live side by side.
Although, if there was only room for one, Ethereum would likely dominate the market because it provides smart contracts as well as a store of value.
This is because it has unlimited use cases, whereas Bitcoin only tackles payment and banking issues. Bitcoin may have a better position in the market, but Ethereum has better technology and bigger potential. A fun fact and an additional although minor Ethereum vs Bitcoin difference:. Save my name, email, and website in this browser for the next time I comment. Inspiring explanation! Keep it up. From the past few years, many people start their business with blockchain technology.
This article clearly describes the difference between ethereum and bitcoin. Error, failed to subscribe. If problem persists contact site administrator.
Read more. All courses Interactive courses Sign up Free. Table of Contents 1 Comparing the Cryptocurrencies 1. Bitcoin or Ethereum?
You may also like. December 11th, Click here to post a comment. Our TOP 5 Reads: 1. What is an ICO? Understanding Initial Coin Offerings. The Complete Guide to Monero Cryptocurrency. Join thousands of subscribers worldwide. Success, you have subscribed successfully!
Experience Web 3.0.
It is a decentralized digital currency without a central bank or single administrator that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. Transactions are verified by network nodes through cryptography and recorded tban a public distributed ledger called a blockchain. Bitcoin was invented in by an unknown person or group of people using the name Satoshi Nakamoto  and started in  when its source code was released as open-source software. They can be exchanged for other currencies, products, and services. Bitcoin has been criticized for its use in illegal transactions, its high electricity whaat, price volatility, and thefts from exchanges.
Bitcoin may be the largest virtual currency by market cap, but these virtual currencies may one day surpass it.
Decrypt brazenly asked them to spill the beans. However, that may not necessarily make them better than bitcoin overall. And, while Bitcoin leads in terms of adoption, currently other distributed ledgers merit higher technology scores. Fantom is a proof-of-stake blockchain, employing a Practical byzantine-fault-tolerant -derived pBFT consensus mechanism, an optimization of the original solution. For more on pBFT, see here. According to its review, what particularly impresses Weiss about Fantom are two factors connected with this technology. By contrast, once Fantom approves a transaction, it's final and irreversible. Secondly, Fantom makes it possible to perform multiple simultaneous transactions, whereas on conventional blockchains like Bitcoin, only one new block can be written at a time. This, explains the Weiss review, creates a bottleneck. In essence, the Fantom protocol allows—and even encourages—validators to produce as many blocks they can, as fast as they can.
We've detected unusual activity from your computer network
These values can be things other than digital currencies, making it different from Bitcoin. That being said, even on the face of it, Bitcoin and Ripple are designed to be completely different types of cryptocurrency with very different goals. As of Octoberapproximately organizations in the Enterprise Ethereum Alliance from around the world were testing a version of Ethereum's blockchain network in a host of industries and sectors. This is why the possibilities with building on Ethereum are endless. The blockchain thus stands as a tamper-proof record of all transactions on the network and is accessible to all participants. Institutional Press Awards. It is shareable and downloadable by all other nodes on the network. Stellar certainly appears to have what it takes to outperform bitcoin. Weiss points out that the technology, while promising much, is still largely experimental, which means that roadblocks and limitations are, as yet, hard tha spot. Beyond these similarities, apples and oranges are quite different, and so are Ripple and Bitcoin. ZCash Wuat is a cryptocurrency with a decentralized blockchain that provides anonymity for its users and their transactions. On the whole, Bitcoin and Ethereum are different applications of blockchain technology that are both gaining traction, although the intent behind the projects is distinct. In fact, Bitcoin still has the larger user base, which comes with mainstream appeal and substantial interest from developers.