With the technological advancement of cryptocurrencies, there is a constant debate between bitcoin and Ethereum among cryptocurrency lovers. But first, you have to know about cryptocurrencies. You should know that cryptocurrencies usually work the same way as normal currencies do. Currencies that do not fall under normal currency are known as cryptocurrencies. The major difference between cryptocurrency and the normal currency is that it is decentralized. This means that these currencies do not have control from any authority like ban or government. The price of a cryptocurrency goes up when most people want to use it.
These currencies are now a form of exchange. There is no third party in cryptocurrency like banks, money lenders, and the government. Cryptocurrency follows cryptographic rules, which ensure that the transactions are kept secure. Cryptocurrency makes use of blockchain, which is records of the transaction, also known as blocks. These cryptocurrency-related transactions are set to public and as the name suggests, can be viewed by anyone.
Bitcoin came into the market in 2009 by an individual or a group of people, also known as Satoshi Nakamoto. When it comes to bitcoin, this particular cryptocurrency allows investors to easily send and receive money to almost any part of the world. These payments are secured using cryptography. Out of many advantages of using bitcoin, one is that the bitcoin investors can send and receive bitcoin anonymously, which means without revealing their identity, and that, too, with lower transaction fees.
Ethereum: it was made in 2015 by Vitalik Buterin. It is a cryptocurrency that gives ether tokens. It works the same as bitcoin. Ether is known as a decentralized cryptocurrency that operates through a peer-to-peer network. Ether is paid for services with computational power. Blocks are created and added to the blockchain. Ether has many similarities with bitcoin. It is used to prepare peer-to-peer payments. Smart contracts are ready, and it prepared with some set of rules.
Difference Between Ethereum And Bitcoin
There is an ongoing hype between bitcoin and Ethereum. These crypto currencies has gained popularity all around the world. Bitcoin has highest market cap among all the cryptocurrencies. Ethereum does not have any revolutionary effect, but bitcoin has taken inspiration. With the advancement of technology, many functions have been added in this particular form of crypto currency.
- Beginning: Bitcoin was the first cryptocurrency released in the year 2009. It is said that it was created by Satoshi Nakamoto. Now, if we talk about Ethereum, the cryptocurrency was first released in 2015 by Vitalik Buterin. It uses the concept of blockchain and bitcoin on the platform and provides more functions. Ethereum works on smart contracts.
- Ideas: In bitcoin, there is a peer-to-peer transaction. This process is comparatively safer and works as replacement of fiat currencies. The traders never actually get to face any problem or any legal obligation using the bitcoins. There is no centralized authority for you to control. Ethereum works on peer-to-peer transactions as well. It offers a platform for the creation and building of smart contracts. Smart contracts allow the exchange of anything of value shares, money, or estate and so on.
- Mining process: in the transaction of bitcoin, miners validate transactions using proof of work. This same goes applicable with Ethereum as well. Using the proof of work, miners worldwide make a try to solve complicated processes and add a block in the blockchain. Ethereum works on proof of stake. On the basis of proof of stake, miners can validate a transaction on how many coins he owns. A person holding more coins will have more power.
- Charges: the total transaction fees of bitcoin is optional. You can pay the miner more money to give him more attention to the transaction process. The transaction will also be made if you do not pay the fee. For Ethereum you have to pay some ether to make the transaction successful. This gas makes this transaction happen and allows the transaction to be added to a blockchain.
In the transaction on cryptotrader.softwarea block is added to the blockchain, and it takes about 10 minutes. In Ethereum it takes about 12-15 seconds. Using of hashing algorithm is used in the system to maintain privacy and it make sure the safety. Bitcoin uses hashing algorithm of SHA 256 whereas Ethereum uses the ethash. So, this was all about the differences between Bitcoin And Ethereum.