Differences Between Bitcoin and Ethereum
The programming language of the Bitcoin is the stack-based language where the transactions take minutes time to get confirmed whereas in the case of the Ethereum, Turing Complete is the programming language used and it takes the seconds time in order to confirm any transaction taking place.
The principle of distributed ledgers and cryptography dictates both Bitcoin and Ethereum, but the two differ technically.
What is Bitcoin?
- Bitcoin is a global digital currency. It allows people to own their own money instead of letting the banks or other agencies maintaining them.
- It also uses a blockchain. The blockchain stands as a tamper-proof record of all transactions on the network, accessible to all participants thus increasing the reliability of bitcoins. The blockchain provides many benefits. They’re improved efficiency, minimum risk, and increased compliance in regulatory matters.
- They are not physically present, they are only balances associated with public and private keys.
- Bitcoins are yet to be recognized as a formal medium of payment. However, they have created a strong place in the financial industry. That’s why people talk and debate a lot about them.
- The best part of Bitcoin is that it charges a meager amount of fees compared to any other traditional medium of payment. A decentralized authority regulates it, unlike those currencies that are issued by the government.
- It also provides financial stability for people who live in countries with unstable currencies.
What is Ethereum?
What most people don’t know about Ethereum is that it is not a digital currency. Ethereum is entirely built on the blockchain technology with many variations. It helps in building smart contractsSmart ContractsSmart contracts are digital transaction protocols that verify, control, and self-execute an agreement, embedded in computerized codes on a blockchain, if parties meet predefined rules. Unlike traditional (physical) ones, these contracts occur among anonymous parties and are enforced automatically without the involvement of any third party. , and the revolutionary EVM (Ethereum Virtual Machine). Ethereum has a currency called Ether that helps in creating peer-to-peer contracts.
- Ether has two functions. Firstly, it is treated as another cryptocurrency and regularly used as a digital currency. Secondly, it is also utilized for monetizing work and running applications in Ethereum.
- The potential usages of Ethereum are wide and are run on its platform-specific cryptographic token ether. Many developers want to use Ether as a pass so that they can create applications and can make sure that they run inside Ethereum.
- One of the best things about Ethereum is that it is the most reliable decentralized software ever. Plus, it is also the largest and open-ended that created Distributed Applications (DApps) and smart contracts. DApps are built in such a way that there can never be a third party interference like fraud, downtime, or control.
- Along with being a platform, Ethereum also acts as a programming language which we call “Turing Complete”. This programming language runs on blockchains. Developers can use this language to create and publish applications.
- The smart contracts system of Ethereum helps in providing enhanced security than usual, a traditional system of contracts and as a result, pare down the related costs.
Bitcoin vs Ethereum Infographics
Let’s see the top differences between Bitcoin vs Ethereum.
- While both are mostly compared for their cryptocurrencies, one of the main differences is that if we compare them, bitcoin is a more stable currency. However, Ethereum promises to enclose a wider range of applications with Ether.
- Although Bitcoin and Ethereum charge fewer transaction costs, they still charge transactions in different ways. The strangest thing is when you use Ethereum, you need to take care of three factors to reduce the costing – bandwidth usage, storage needs, and complexity of the transaction. The block size limits the transactions and each transaction competes with each other.
- More than two-thirds of all the available Bitcoins have been mined and the rest is choosing the early miners whereas around 50% of Ethereum coins have been mined.
Bitcoin vs Ethereum Comparative Table
|Basis of comparison||Bitcoin||Ethereum|
|What is it?||A Currency||A Token|
|Basic Build||Ethash||0053ecure hash algorithm, SHA-256|
|Programming Language Used||Stack-based language||Turing complete|
|Issuance Time||The transaction is completed in 10 minutes approximately||The transaction is completed in 10 to 20 seconds|
|Supply Type||Deflationary (a finite amount of bitcoin will be made)||Inflationary (much like fiat currency, where more tokens can be made over time)|
|Utility||Bitcoins help in buying products or services and they also help in storing the value. To give an example, we can talk about gold and how we use it.||Ethereum helps in making decentralized applications that are also called DApps.|
Both operate on what is called “blockchain” technology, however, Ethereum’s is far more robust allowing for the building of decentralized applications to be built on top of it. Ethereum is an advancement based on the principle of the blockchain, that supports Bitcoin but with a purpose that does not compete with Bitcoin.
This has been a guide to Bitcoin vs Ethereum. Here we discuss the top differences between them along with infographics and comparison table. You may also have a look at the following articles for gaining further knowledge in finance –