Differences Between Bitcoin vs Ethereum
Bitcoin and Ethereum are two cryptocurrencies that need no introduction for anyone active in the cryptosphere. However, if you are new to the ecosystem, you will definitely ponder over what makes Bitcoin and Ethereum different when both of them are blockchains. Well, the answer is simple but difficult to explain.
I will still go ahead with it and try to throw some light on it. But before I tell you more about the difference between Bitcoin and Ethereum blockchains, I would highly recommend you go through the links below.
These will give you a fair idea about the two cryptocurrency giants. Now that you have read the aforementioned articles, I am assuming you have a fairly good idea of both cryptocurrencies. Let us now get into the specifics of each blockchain and see what makes them different. It was invented by Satoshi Nakamoto in as a peer-to-peer electronic cash system to give the world an alternative to the traditional banking system.
Also, unlike traditional money, you can send Bitcoin money to anyone and anywhere without seeking permission from banks or governments. Read about Bitcoin mining here. Update: Bitcoin has implemented segwit and Lightning network is on the rolling for more scalability that is must need to compete with other payment methods. First things first.
You can, but you need to understand what those transactions are for I am going to explain that further in this article. And these types of logical codes are written, executed, and are stored historically on the Ethereum blockchain forever for future reference. Ethereum is different from Bitcoin mostly because with Ethereum you can not only transfer money i. See our detailed guide on smart contracts and DApps here. Post that, the cryptocurrency asset Ether helps in executing these apps and contracts.
Therefore, Ethereum is not just a blockchain for transacting money. Instead, it is a decentralized programmable blockchain-based software platform that its married to its cryptocurrency asset called Ether — ETH which runs the Ethereum network. Update: Ethereum is right now wrestling to update its network for higher scalability by implementing Casper Protocol. Earlier last year the Ethereum network struggled from processing transactions from even a game like CryptoKitties.
In this way, they all earn their cut. If a replica of these above applications is made on the decentralized Ethereum platform, it will result in the following advantages and a positive disruption of each industry:. Another aspect to understand is Ethereum is more of a company that has co-founders and executives.
And this has solidified further with the formation of EEA-Enterprise Ethereum Alliance , the details of which I have already explained. Instead, one can call it a decentralized platform for running DApps and smart contracts that get fueled by a cryptocurrency Ether that has some market value. I think this makes more sense in my opinion. In my opinion, Ethereum is fundamentally different from Bitcoin. Ethereum and Bitcoin are not competitors. They coexist and solve different types of problems in the real world and open up a possibility for a new future.
However, this may soon change when Bitcoin develops other capabilities of Ethereum with the launch of RSK network. RSK goal is to add value and functionality to the Bitcoin ecosystem by enabling smart-contracts, near instant payments and higher-scalability. But wait! That is not me making any predictions because in this crazy blockchain and crypto world anything is possible in the blink of an eye.
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Both offer anonymous transactions, and neither of the two is controlled or regulated by a centralised body.
Samantha Radocchia via Quora. Anyone can create an account to buy and dfiferences Bitcoin through websites like Coinbase. The price of Bitcoin then fluctuates based on supply and demand. Based on the supply and demand of those tokens, their price just like a share of stock after a company holds an Initial Public Offering, otherwise known as an IPO goes up or. Some people buy Bitcoin because they want to store their money somewhere other than a bank.
Join Bitcoin Community
Bitcoin and Ethereum are undoubtedly among the most widely discussed cryptocurrencies, especially after the unparalleled bull run at the end of launched prices to unseen heights. While they are among the leading and most popular cryptocurrencies, the technology backing each one of them is fairly remote. Put simply, Bitcoin represents a distributed peer-to-peer P2P digital currency which can be transferred in an instant and securely between two parties, regardless of their current whereabouts. Bitcoin was introduced in October with a whitepaper published by an anonymous person or group of people known as Satoshi Nakamoto. Bitcoin is based on blockchain technology. The blockchain represents a public ledger that contains all transactions in a given system which have ever been executed. The ledger itself is stored throughout the entire network and to update one is to update them all.
Both offer anonymous transactions, and neither of the two is controlled or regulated by a centralised body.
Last year, thanks to stratospheric rises in value, lots of people became aware of the existence of Bitcoin, as well as another often-cited up-and-coming cryptocurrency, Ethereum. For perspective — that means Bitcoin is currently held at around the same value as Unilever, whereas Ethereum has around the same market value as Starbucks or Walgreens Boots Alliance. Also, before we go any further I just want to reiterate that investing in cryptocoins or tokens is highly speculative and the market is largely unregulated.
Anyone considering it should be prepared to lose their entire investment. While to many Bitcoin and Ethereum are both simply examples of cryptocurrencies — digital money transfer systems which use blockchain technology and encryption — there are subtle differences in how they work and what they can be used. So, starting with the basics — cryptocurrency is a term that has come to be used to identify a newly emerging asset class. In some ways it is a slight misnomer — currencies are stores of value which we can use to purchase goods or services, and most cryptocurrencies cannot yet be exchanged for anything, other than other cryptocurrencies.
So, while not currencies in the strict sense — they are certainly assets, as they hold value and can be sold for dollars, pounds and euros.
Much like gold — which not everyone will accept in trade, but everyone agrees has a value. Unlike gold, however, cryptocurrency exists only in the digital world. So, how can we trust it is real? Well, basically, cryptocurrency stores value via mathematics. A simplified way of looking at it is that each cryptocurrency and there are over 1, of them is a very complex algorithm.
The output of each algorithm tells us who owns each unit of that particular cryptocurrency — and is known as a blockchain. Bitcoin was the first success at creating a blockchain-based currency or asset which beat the double-spend problem inherent with digital assets.
It overcame this issue in two ways — encryption, and distribution. The use of public and private key encryption means that although all the transactions on the network are public essential for verification purposesonly those with permission can edit the data on the parts of the blockchain where they are authorized to do so.
Simultaneously, its distributed nature — the fact that the blockchain algorithm is running on not just one, but potentially millions of machines — means that consensus must be established before updates to the blockchain are accepted across the wider network. Bitcoin was the first true cryptocurrency and has been in circulation since Ethereum is a far more recent development, going live in Ethereum is certainly faster than Bitcoin — with transactions typically settling in seconds, rather than minutes.
But it also takes things. While still blockchain based, and operating as a store of value, its fans and evangelists see it as a platform for distributed computing, which comes with its own built-in currency, called Ether.
While the Bitcoin blockchain can simply be pictured as a database of accounts or wallets with an amount of currency stored in each, the Ethereum network blockchain is a more sophisticated construction, capable of storing computer code — applications — that can use the CPU power going into the network to execute. The currency — Ether — represents this CPU power — so the idea is that Ether will be bought and sold by businesses, governments or individuals to allow them to tap into the vast, distributed resources of the Ethereum network to run their own apps.
This is a way of automating contracts and agreements so they will execute when consensus says that conditions have been filled. Though simple, their uses are potentially widespread — such as enabling payment systems cryptocurrency exchange platform list will release funds on completion of work, or authorizing the transfer of ownership of good when payment has been.
The Ethereum network also allows the creation of other cryptocurrencies, or tokens, using the same protocol as Ether but distributed on different blockchains, which can be public or private.
This means they can be created by organizations to represent shares, voting rights or as means of proving identity or authorization credentials. What I can do is suggest some things that you should bear in mind, if you are looking to make speculative investments in cryptocurrency.
Ultimately, the long-term growth of any cryptocurrency or indeed business depends on useful applications being found for its assets. If Bitcoin goes on to become a widely accepted form of currency, or the Ethereum network becomes an established standard for distributed computing, then the value of these assets is likely to continue to grow. On the other hand, in technology, there is always something snapping at the heels of the front-runners. Newer and more efficient algorithms could replace either Bitcoin or Ethereum.
Additionally, both face the threat of government regulation. The value of many cryptocurrencies including Bitcoin and Ethereum have moved downwards since the start of the year, which has been attributed to threats of their trade being regulated by governments in China and Korea. What is clear is that the huge increases in value we have seen over the last five years has largely been due to speculative investment — people buying them in the hope that they will be able to sell them for more money to someone else in the future.
This is often a recipe for inflated prices and an inevitable crash back down to earth — something that many believe could happen at any time and may have already started. Ultimately, achieving sustainable growth will be dependent on useful applications. More businesses accepting Bitcoin as a method of payment, and more applications becoming widely used and supported on the Ethereum network.
Share to facebook Share to twitter Share to linkedin Last year, thanks to stratospheric rises in value, lots of people became aware of the existence of Bitcoin, as well as another often-cited up-and-coming cryptocurrency, Ethereum. Adobe Stock Adobe Stock. Bernard Marr. Read More.
How Bitcoin Works
When thinking about cryptocurrency investing, it is absolutely critical to do thorough and in-depth due diligence in order to ensure that you are well aware of the specifications of the project at hand and its potential to grow and, hence, to justify your investment in it. But wait! The use of public and private key encryption means that although all the transactions on the network are public essential for verification purposesonly those with permission can edit the data on the parts of the blockchain where they are authorized to do so. By BlockApps T December 10, Ether is like the fuel for running commands on the Ethereum platform and is used by developers to build and run differenxes on the platform. Buterin also announced that Dr. While they are commonly regarded as the two differrnces digital currencies, the truth is rather different. Their purposes Bitcoin is a store of value and a way to send money to. However, this may soon change when Bitcoin develops other capabilities of Ethereum with the launch of RSK network. Harsh Agrawal. The sweet spot where both the curves intersect is the equilibrium.