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For many years in a row, Ethereum has remained number two in the cryptocurrency market. Bitcoin traditionally takes the first place. And although it is predicted to lose primacy, it is still firmly holding onto its position. But it is easy to exchange 2.3 ETH to USD today.
What makes bitcoin (BTC) different from Ethereum (ETH)?
In addition to value and market share, there are, of course, other differences. Bitcoin was a new technology when it first appeared. You might say, experimental, raw. Satoshi developed the concept of a decentralized currency and implemented it. In the end, the network turned out to be quite simple: every cryptocurrency user is a blockchain participant, and everyone can provide their own capacity to process transactions.
At the same time, each transaction is stored in the open but in encrypted form. You can see the history of transactions over time, but only if you know the number and key of the wallet you're interested in.
So what's different about the Ethereum blockchain?
It's more practical and multifunctional. Bitcoin can only be used as currency (and that's often inconvenient). On the other hand, Ethereum allows you to embed computer code and perform transactions using the Ethereum network. This expands the range of possibilities.
Immediately, there are a lot of application options. One of them is smart contracts. You can use them to enter into contracts. For example, on the sale of real estate. The data is entered into a smart contract and cannot be deleted or corrected afterwards (unlike a paper contract). After the funds are credited to the ETH-wallet, the contract is automatically considered signed. And this is just one use case. In theory, there could be hundreds, up to and including state elections.
Ethereum also allows for the creation of other cryptocurrencies based on its blockchain. One successful example is EOS. Today, the cryptocurrency is in the top 20 of Coinmarketcap, but at one time it even made it to the top 5. You can even find instructions online on how to create your own coin based on Ethereum.
Technical differences between Bitcoin and Ethereum
The principle of the blockchain in both cryptocurrencies is the same, but the performance is different.
- The mining algorithm Bitcoin has SHA256 and Ethereum has Ethash.
- Network Hashrate Bitcoin has a much higher one since there are more miners involved. Today, about 80% of all miners in the world eat BTC.
- Transaction processing speed On average, a bitcoin transaction takes a few minutes to process, while Ethereum's transaction takes a few seconds. Both currencies have speed decreasing in case of network congestion, but Ethereum's speed will be lower anyway. Therefore, ETH as a currency is more viable.
- Issue Limit The Bitcoin network has a limit of 21 million coins. Of those, 88% have already been mined (with a significant portion irretrievably lost back at zero). And the more coins that are mined, the harder it will be to mine the next ones. This protects the cryptocurrency from inflation. Initially, Ethereum had no issue limit.It was added once, but quickly removed. Now Ethereum again has no limit on the number of coins in circulation. The only thing that protects the coin from inflation is the difficulty of mining.
ETH Coin As A Currency
Cryptocurrency at a bargain price for exchange and purchase is available at Alligat0r.com. If you compare it with bitcoin, it has faster transaction processing and lower fees. As a currency in the traditional sense, Ethereum is more convenient as a means of payment for transactions. Smart contracts do an excellent job with this function.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.