BITCOIN AND ETHEREUM: THE DIFFERENCE
Cryptocurrencies are recently gaining more attention in the world; this is not unconnected to the advancement in technology and functional advantages of these digital currencies. Bitcoin and Ethereum are the most popular of them. This piece displays their various features and differences which make them to be outstanding.
A Bitcoin is a cryptocurrency invented far back as 2009, created by Satochi Nakamoto. It caters for online transaction. Like the traditional hand-held currencies (i.e. Euros, Dollars, Pounds, etc.), it is used as a medium of exchange in business transaction and it is electronically based. Bitcoin is decentralized and not controlled by external force ranging from financial institutions, national policies, economic change and crises, etc. It is immune to outside world occurrences. Bitcoin trading involves direct peer-to-peer transaction without the need for middle men. It is created through the process called mining. Bitcoin was first launched digital currency in the world history. This cryptocurrency is claimed to be the best over the years.
Ethereum is also a digital currency which is created in mid-2015. It is considered as the strongest rival of bitcoin. It has more features and applications than than the bitcoin. Ethereum is not only a cryptocurrency,it is a blockchain-based platform which has several sections. It consists the Ethereum Visual Machine,smart contracts,etc. It engages in online transaction using its currency called ether. Ethereum is somewhat similar to Bitcoin as it is decentralized, using its smart contracts for transaction which aids verification and enforcement. Being decentralized makes it to be secured and immune to fraudulent acts. It is ranked the second best digital currency in the world. Ethereum is developing in all aspects in order to meet up with Bitcoin as the best cryptocurrency. Within the short period of its existence, it has advanced technologically.
The Differences between Bitcoin and Ethereum
Among the digital currencies in the world, Bitcoin and Ethereum are the ones gaining more attention and have more functional aspects. Bitcoin and Ethereum are in a competitive relationship. Ethereum is Bitcoin’s strongest competitor as it is more advanced than the other digital currencies.
However, it is essential to check out the salient features of both cryptocurrencies in order to know their differences, thereby knowing their competitive strengths and inherent weaknesses. In tandem with the above, the following are the differences peculiar to Bitcoin and Ethereum:
Transaction speed is very high in Ethereum than the Bitcoin. The average time Bitcoin uses for any transaction are about 10 minutes compared to that of Ethereum which ranges from 12-15 seconds. Ethereum is the fastest blockchain-based platform. This high speed is connected to its possession of the Ghost protocol.
Cost of Transactions
Costing transactions in both digital currencies are different. The cost transactions depend on the bandwidth usage, computational complexity, and storage needs. This transaction is called Gas in Ethereum and it is limited per block while in Bitcoin, the cost transaction is limited by block size.
Ethereum is more flexible than the Bitcoin. With adequate computing power and time, there is nothing that cannot be calculated in Ethereum as it possesses a Turing complete internal code. Bitcoin is not capable of doing this. The complexity of the Turing complete internal code in Ethereum also causes security complications.
Bitcoin is more scarce compared to the Ethereum. Existing Bitcoins amount to two-third of the total Bitcoin that can ever be mined and they are already possessed by early miners which make it limited to the public. In Ethereum, the amount of ether produced each year are the same and not reduced while in its fifth year, its 50% will be possessed by its miners. Also, Bitcoin rewards halve every four years while Ethereum rewards are based on Etash in which 5 ether are allocated to each block. Etash is Ethereum’s proof-of-work algorithm. It is a memory hard hashing algorithm. While Bitcoin uses more centralized ASICs, Ethereum’s Etash supports decentralized mining.
In brief, Ethereum which has only existed for a while is advancing day-by-day trying to outshine the Bitcoin, the oldest digital currency created several years from it. It features several technological advancements of the Bitcoin and there is possibility in coming years to be ranked as the best developed cryptocurrency.