We have been talking about cryptocurrency like Bitcoin, Ethereum and even Airdrops for a while now and we have not really discussed What Bitcoin and Ethereum actually is.
So in this Article, we will be examining these forms of Cryptocurrency and looking at their differences and also their similarities
So let us start with Bitcoin and then we move to Ethereum
What is Bitcoin?
Bitcoin is a distributed peer-to-peer (P2P) form of digital currency which can be transferred in an instant and securely between two parties, regardless of their current whereabouts.
It is essentially digital money that you can send to any other Bitcoin user anywhere around the world in a secure and anonymous manner.
Bitcoin was introduced in October 2008 with a whitepaper document published by an anonymous person (or group of people) known as Satoshi Nakamoto.
The document is called “Bitcoin: A Peer-to-Peer Electronic Cash System”. This document introduced the concept of Blockchain and Cryptocurrency to the World. Bitcoin is built on Blockchain technology. The Blockchain is 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. It is this public ledger which contains the history of all past transactions. This is essential to the entire concept of Bitcoin.
Once a transaction is Broadcast and included in a mined block, it is added to the Blockchain. Once this takes place, it can’t be reversed or altered in any way. It will remain in the public ledger and it will verifiable at any given moment. This makes transactions carried out on the Blockchain safe, secured and verifiable.
What is Ethereum?
Ethereum is an open-source public service that uses Blockchain technology to
- Facilitate smart contracts: A Smart Contract is a computer program or a transaction protocol which is intended to automatically execute, control & document legally relevant events and actions according to the terms of a contract in the Ethereum Blockchain
2. Cryptocurrency Trading : This Feature allows users to transact Ethereum between two or more entities in a safe, secure and anonymous manner
Ethereum is the second largest Cryptocurrency platform by market capitalization, behind Bitcoin. Ethereum was proposed in late 2013 by Vitalik Buterin, a Cryptocurrency researcher and programmer. Development was funded by an online Crowdsale that took place between July and August 2014. The system then went live on 30 July 2015, with 72 million coins minted. Ethereum by far the largest open-ended decentralized software platform which enables the creation of Distributed Applications (dApps) and Smart Contracts.
Differences between Bitcoin and Ethereum
- Bitcoin trades in only cryptocurrency, while Ethereum offers several methods of exchange, including cryptocurrency (Ether), smart contracts and the Ethereum Virtual Machine.
- Ethereum uses a “Proof of Stake” system while Bitcoin uses the “Proof of Work” system
- Bitcoin allows only public (Permission-less or Censor-proof) transactions to take place while Ethereum allows both Permissioned and permission-less transactions.
- The average block time for Ethereum is significantly less than that of Bitcoin: 12 seconds versus 10 minutes.
- Bitcoin has a total cap of 21 million coins that will be in circulation While Ethereum has no cap.
- Bitcoin allows the computers (called miners) running the platform and verifying the transactions to receive rewards; while Ethereum does not offer block rewards and instead allows miners to take a transaction fee.
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