Of the past we have heard a lot of a unique economy which is a part of the digital revolution. We have two smart kids on the block namely Bitcoin and Ethereum which are the most sought after cryptocurrency in the digital generation. With all new cryptocurrency we have a complete new reformation in digital banking like it is decentralized.
Both Ethereum and Bitcoin are cryptography-based systems but the technology remains the same as the blockchain is the underlying technology of all crypto-technologies. Interestingly both use encryption and time-stamping and both imply currencies
Sometime we define both the Bitcoin and Ethereum in different ways as the Bitcoin is a digital currency or a cryptocurrency while Ethereum is public blockchain platform for the execution of decentralized smart contracts.
Moreover, Bitcoin was created by Satoshi Nakamoto, as open source code and released in January 2009 on the other hand Ethereum was only launched back in August of 2015 in a minimalist form (command line interface) and is the brain child of a super-bright kid, Vitalik Buterin plus Ethereum also has its own cryptocurrency called Ether which is definitely comparable to Bitcoin. ETH needs to handle ‘transaction + contract’ whereas BTC only needs to handle ‘transaction’.
What are the mining limitations of Bitcoin and Ethereum?
The best part of this is that no single institution controls the Bitcoin network as the Bitcoin protocol – the rules that make Bitcoin work – say that only 21 million Bitcoin can ever be created by miners. But Bitcoin isn’t based on gold; it’s based on mathematics. When your Bitcoin are sent, there’s no getting them back, unless the recipient returns them to you. They’re gone forever. As Bitcoin is a currency within the Blockchain environment, Ether is currency within the Ethereum environment. Ethereum also positions itself as a programming language (EtherScript), Bitcoin does not. Bitcoin is an alternative currency, while Ethereum is the alternative law.
Most of the time we have to wait a bit in money transaction in spite of it being on ATM or through debit or credit but cryptocurrency is lightning fast
How does it happens let’s look into Bitcoin digital payments, and Ethereum digital contracts
- Bitcoin gained popularity as a way to send money quickly and pretty much anonymously, because transactions don’t need to be linked to a certain identity. Transactions are tracked on an online database called blockchain.
- Ethereum is a platform that is designed to support smart contracts, Bitcoin is a cryptocurrency, designed to replace the notes and coins in your pocket with an internet based alternative. Ethereum is designed to be a programmatic platform which can be used to build, deploy and enforce smart contracts entered into by both human and computer counter-parties.
- Ethash is memory hard meaning Ethereum needs memory to run – which in turn means it works more efficiently on a GPU while Bitcoin has ASIC chips that have led to a moore’s law race and concentrated mining power! You can think of it as a ledger that keeps track of all transactions that have ever occurred
- Sometimes the bleak difference between the two can be compared as Bitcoin and Ethereum as internet and email as the Bitcoin was written in a stack based language that isn’t Turing Complete. This means that Ethereum has a broader base to build on and a broader market to enter – as it isn’t locked to being a value transfer ledger – which is where the analogy of Ethereum as a tcp/icp in comparison to Bitcoin as your email.
- We are already familiar with the concept of ledger and the same happens with Bitcoin network of digital cryptocurrency as the Bitcoin stores and keeps the details of every bit of transaction that happens in the Bitcoin network in the digital version of a general ledger, known as the blockchain.
- Contrary to this we have Ethereum that further extends the concept of digital currency i.e cryptocurrency altogether. It is an extended form of blockchain-based platform with many facets as it is a step ahead with features like smart contracts, and the Ethereum Virtual Machine (EVM) with its own currency namely ether for peer-to-peer contracts. The USP of Ethereum goes with the decentralized aspect that makes it entirely difficult for fraud or censorship
- We have more advanced digital concept and terminologies in both the digital currencies like Gas and Block size as both of them cost their transactions in different ways. In Bitcoin, the digital transactions are limited by the block size and they compete equally with each other whereas we have the concept of Gas, In Ethereum, and the costing of transactions fully depends on their storage needs, complexity and bandwidth usage.
- First of all, the pre-set block time in Bitcoin is 10 minutes whereas in Ethereum, the block time is of 12 seconds. So consequently, while Bitcoin transactions normally take a few minutes to be cleared, the Ethereum transactions are cleared almost instantly and in matter of seconds.
- Also, the programming algorithm might pay a prominent role into its fast transaction as Ethereum uses a Turing Complete programming language and a Turing Complete internal code owing to which almost anything can be calculated by just providing sufficient computing power and a particular time period.
- In addition, we have the concept of publicly used Bitcoin address, so that anyone can tell how many Bitcoin are stored at that address.