Bitcoin vs Ethereum: Everything you need to know
As you are searching for this article, we believe you know what Bitcoin is. It is the first-ever and also the most popular Crypto in the entire world. On the other hand, Ethereum is the network that backs the second largest Cryptocurrency, Ether.
That is why the comparison between these two most popular and demanding Cryptocurrencies always goes on.
In a lot of ways, Bitcoin and Ether are similar. Both of them are digital currencies that are traded via online exchanges and are also being stored in different types of Cryptocurrency wallets.
Also, these two tokens are decentralized, which means no central bank or authority can issue or regulate them. Both of them use Blockchain, a distributed ledger technology. Apart from all these similarities, these two most popular Crypto coins also have a lot of differences between them in terms of market capitalization.
Here, in this article, we are going to talk about Bitcoin and Ethereum along with their differences from each other. Let’s start the discussion by providing you with a basic understanding of Bitcoin and Ethereum.
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Basics of Bitcoin
It was January 2019 when the first-ever Cryptocurrency, Bitcoin, was introduced. It was developed by the mysterious Satoshi Nakamoto. Bitcoin is an online currency that is secured without any type of central authority.
The concept is completely different from government issues and traditional regulated currencies. Bitcoin is only an online currency without any physical appearance. It only balances associated with a Cryptographically secured public ledger.
If you are thinking that Bitcoin is the first attempt at launching a digital currency, you are absolutely wrong. It is only that it is more successful than all the other previous attempts.
Over a number of years, the very concept of a virtual and decentralized currency has gained a lot of acceptance between government bodies and also regulators. However, Bitcoin is not a recognized payment medium or a store value.
Still, Cryptocurrency has managed to scoop out a particular niche for itself and will also continue to coexist with the usual financial system. This will be the scene despite being debated and scrutinized on a regular basis.
Basics of Ethereum
After Bitcoin, we can definitely say that Ether is the second most popular and successful Cryptocurrency. Apart from being the spine of digital currencies, Blockchain technology is continuously being used for crafting a number of other applications.
Ethereum is basically the largest and also an open-ended decentralized software platform that was launched in July 2015 and right now is established pretty well.
Ethereum is the one that enables the deployment of dApps or decentralized applications and smart contracts in order to be built and also run without any type of downtime, control, fraud, or interference from any third party.
Ethereum has its own programming language, which is backed by the Blockchain network and enables developers to develop and run distributed applications. Ethereum’s potential applications are wide-ranging and also powered by its native Cryptographic token, which is named Ether.
In the year 2014, Ethereum launched a presale for Ether that had received an overwhelming response. On the Ethereum platform, Ether is like the running fuel commands and is specifically used by the developer for building and running applications on the platform.
The purpose behind the use of Ether is mainly two;
- Ether is traded as a digital currency on the exchanges in the same way as any other type of Cryptocurrencies.
- In order to run applications on the Ethereum platform, Ether is being used.
People across the globe use ETH or Ether for making payments, as a store of value, or also as collateral.
Bitcoin Vs. Ethereum: Key Differences
The main principle behind both Bitcoin and Ethereum is Cryptography and distributed ledger. However, these two differ in a number of ways.
Such as, on the Ethereum network, the transactions might contain executable code; at the same time, data affixed to the Bitcoin network transactions are usually only for keeping the notes.
The other difference comes in the form of block time. Where Bitcoin transactions take around a couple of minutes, Ether transactions take only a few seconds. Now come to the algorithm on which they run.
- For Ether, it is Ethash.
- For Bitcoin, it is SHA-256.
Proof of Work or PoW is the consensus protocol that is used by both Ether and Bitcoin. It lets the nodes of respective networks agree on the state of all types of information pieces that are recorded on their particular Blockchains, along with preventing some particular types of economic attacks on those specific networks.
