Bitcoin Vs Ethereum: How are they different from each other?

Bitcoin Vs Ethereum: How are they different from each other?

By jordanjnr | Crypto Digest | 4 Dec 2019


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By this point,we should all be aware of what Bitcoin is.

But if you're not aware, Bitcoin,in its simplest form is the world's premiere digital currency which is decentralised(isn't controlled by any huge governing body), must be mined to be obtained(mining is the process of solving complex mathematical problems with your computers CPU and GPU in exchange for Bitcoin as a reward) and is limited to 21 million in supply.

Bitcoin aims to completely replace traditional money(fiat) in circulation today.

All of Bitcoin's transactions are recorded and publicly displayed on Bitcoin's blockchain(you can read my article explaining what a Blockchain is here).

Now for ethereum.

Ethereum is a decentralised platform which can be used to run apps on its Blockchain(these apps are called Dapps or Decentralised apps),and also uses smart contracts.

The platform has its own currency known as Ether,which is used to pay for transactions which use up computing power.

As we can see, Ethereum and Blockchain differ in their core concepts. Ethereum aims to be a global computer, while Bitcoin aims to completely replace money.

Looking at their ambitions can be useful in determining what would move their prices. For Bitcoin, improvements to the Blockchain could be enough to significantly move the price up, while an increase in the number of transactions happening on Ethereums blockchain can increase the price of Ether.

But Bitcoin and Ethereum do not only differ in their core values.

They also differ in the following ways:

1. Their available supply

Bitcoin is limited to 21 million in supply. This means that there would only ever be 21 million bitcoin created. Bitcoin is currently produced 12.50 times every ten minutes, but this number is halved every four years(the next halving occurs May 2020). 

Ethereum on the other hand is produced 2 times every 15 seconds(ie 2ETH are produced every 15 seconds). It does not have a definite number that will ever be created, but 18 million are created every year. It could also be mined.

2. Differences in their Blockchains

Both Ethereum and Bitcoin run on Blockchain technology,but there are differences between their Blockchains.

For the Ethereum Blockchain,it runs on a Proof of Work system,and includes blocks or varying sizes.

Blocks are mined every 15 seconds on the Ethereum Blockchain by a process known as the Dagger Hashimoto algorithm. Ethereum is not usually mined by ASIC devices, but is mined by Graphics cards.

Bitcoin however is mined exclusively by ASIC devices.Its blockchain consists of specifically sized 1MB blocks mined every 10 minutes by SHA-256 hashing technique.

[If all that sounded strange,check out my post on what a blockchain is here.]

3. The way their systems work

On an Ethereum blockchain,smart contracts are used. A smart contract is simply a contract that is able to execute itself at a particular time,date and at certain factors. The ethereum Blockchain also allows anyone to develop apps called Dapps on its blockchain,once the person is able to master its programming language known as Solidity.

Bitcoin on the other hand is run on its own Blockchain. This Blockchain uses a proof of work system, and any changes on the blockchain must be vetted by all computers on the blockchain before it is deemed fit to be executed. This is one of the many reasons for the slow development of the Bitcoin Blockchain transaction speeds, but is a very important factor for security.

Now that we know all this, which one of the two is better? Bitcoin or Ethereum?

That question can only be answered by your needs and where you put either of those two cryptocurrencies in your plans for the long run.

If you believe that Bitcoin can replace money,then you should invest in it at all costs(because of its limited supply). But if you believe that Blockchain is the future of computing, and Dapps will run the future,then you should invest in Ethereum.

Either way,they're both great investments, and having both in your arsenal will equip you for the future,whichever way that future might head in.

 

Please if you find this post interesting entertaining or educative kindly leave a tip down below to support my work. Thanks,and to the moon!


jordanjnr
jordanjnr

Hello! I am a Blockchain enthusiast,bitcoin investor,CEO of BigTycoon group and I love crypto! Hit me up @TycoontechBlog on twitter!


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