Now everyone in the Internet circle should have heard of bitcoin and digital currency, but not necessarily know that the blockchain is the technical basis of bitcoin and cryptocurrency. But the blockchain to be talked about today is not only the hottest topic in the encryption world, but also the technology that many industries need. Many large institutions and venture capitalists have invested billions of dollars in “blockchain technology.” A blockchain is an online public ledger that records every transaction made in a given system, allowing it to track funds across the network.
Or talk about the topic of this article, for a newcomer to the encryption ecosystem, you must have a question, bitcoin and Ethereum are blockchain, then what is the difference between these two encryption.
Bitcoin – the first application of the blockchainThe first and most famous implementation of the blockchain is “bitcoin.” Bitcoin is a point-to-point digital currency that provides the world with an alternative to traditional banking systems.
Bitcoin is the first digital currency, launched in 2009, and we all know that it started in 2008 in the book of Nakamoto. It all starts with a vision of making an alternative P2P currency.
In other words, Bitcoin’s blockchain is a publicly shared ledger that ensures easy billing and transfer of value (ie, currency) in the form of bitcoin.
Bitcoin was created through a process called “mining” and stored in the bitcoin blockchain. Unlike traditional banking systems, you can send Bitcoin to anyone, anywhere, without any permission from a bank or government agency. Basically, it is operated by a decentralized organization.
Bitcoin’s blockchain doesn’t affect whether you are a human or a machine. Thousands of bitcoin nodes on the blockchain can also verify the legitimacy of the transaction. This is why there is no need for third-party intermediaries like banks.
In the past 10 years, the acceptance of digital currencies by regulators and government agencies has increased. Although it is not a formally recognized method of payment or value storage, it has managed to create a space for itself and to continue to coexist in the financial system, although it is often viewed and debated. Recently, its extensive use illustrates the intrinsic value of the blockchain concept.
Ethereum (Ethereum) – not just payment technology Blockchain technology is further used to create applications, not just digital currencies like Bitcoin.
Ethereum is such an application, which was launched in July 2015. It is the largest and most popular open and distributed platform that can execute smart contracts and distributed applications (DApps) without downtime, fraud, and interference from third parties. Smart contracts allow you to buy real estate, stocks – you can actually be anything without having to go to any service provider. It completely removed the middleman. This is why investors believe that Ethereum is a more powerful and potentially more profitable technology.
In essence, Ethereum is not only a digital currency, but also a programming language that runs on the blockchain. It helps developers build and publish the distributed applications they need.
Ethereum’s blockchain is not just about managing and tracking transactions like Bitcoin’s blockchain. But it can also be programmed by storing and executing new coded programming logic.
In 2014, Ethereum launched the pre-sale of the crypto token ehter, and the response was overwhelming. Ether is like a channel that moves on the Ethereum platform, and developers want to develop and run applications in Ethereum. Ethereum has a wide range of potential applications.
In general, ehter has two uses. It can be traded as a digital currency like other cryptocurrencies, or it can be used to build and run applications in the Ethereum platform to monetize work.
Another important aspect of Ethereum is the formation of the Ethereum Alliance (EEA). EEA brings together start-ups and Fortune 500 companies to work together on industrial applications in Ethereum. The purpose of the EEA is to build a private version of an Echelon’s blockchain of eligible members (such as banks) to meet its specific business needs. Whenever a member company writes code based on the Ethereum blockchain, it can be shared with it if it is useful to other member companies. This cooperation and development is managed and assisted by the European Economic Area.
Bitcoin vs Ethereum
Both Bitcoin and Ethereum are based on the principles of distributed ledgering and cryptography, but there are many technical differences between the two. The key technologies are as follows:
· Programming language
The programming language used by Bitcoin is “stack-based”, while Ethereum is based on “complete conversion.”
· Block time
The confirmation time for the Ethereum transaction is seconds (12-14 seconds), while Bitcoin is about 2-10 minutes.
Bitcoin uses the secure hash algorithm SHA-256, and Ethereum uses Ethash.
· Block restrictions
The block size of the Bitcoin blockchain is limited to 1MB, which means that the number of transactions in a block cannot exceed 1MB. On the other hand, the Ethereum blockchain has no block restrictions. The miners decided to invest in the number of transactions in a block.
In fact, Bitcoin and Ethereum are also different in general use. Although Bitcoin is positioned as a substitute for common currency, Ethereum facilitates p2p contracts and applications in its own currency. That’s why Bitcoin has become a more stable digital currency to a large extent, and Ethereum is more about smart contract applications that allow developers to build and run DApps.
In summary, Ethereum is an improvement based on the blockchain principle, which supports Bitcoin, but its purpose is not to compete with Bitcoin. However, with the increasing acceptance of Ethereum and the increasing capitalization of the market, Ethereum is facing competition with all cryptocurrencies, especially in trading. Currently, ETH’s market capitalization exceeds Litecoin and Ripple, but it lags far behind Bitcoin.
In general, Bitcoin and Ethereum use different versions of blockchain technology and are not competitors. They coexist with different intentions and are ready to build themselves and open up a possibility for a new future