The blockchain technology has been in involved in the most important news worldwide for the last 2 years. Even if some people haven’t heard of digital currencies or cryptocurrency yet, they sure have heard of Bitcoin. Not so many of them have heard about Etherium. “What is Ethereum?” you ask? Ethereum is another cryptocurrency and a platform, similar to Bitcoin, but still very different. In this article will explore the difference between Bitcoin and Ethereum.
With massive trading volumes and market capitalizations for some of the larger crypto-currencies rivalling that of some of the worlds largest corporations, the Ethereum vs Bitcoin is like the competition between Messi and Ronaldo or Federer vs Nadal. They are each special., but different. We will try to make some light in these very disputed topics, trying to showcase what makes Ethereum different and what are the differences between cryptocurrencies.
What is the difference between Bitcoin and Ethereum?
To discover the difference between bitcoin and Ethereum, we first need to explain and understand how and why each was created. How does Bitcoin work? How does Ethereum work? What is the value of Bitcoin and what is the value of Ethereum? The fight for cryptocurrency supremacy is disputed and we will once it for all try to put everything into a simple and understandable language so that even cryptocurrency newbies can fully understand what is the difference between Bitcoin and Ethereum.
Let’s start by explaining what is Bitcoin.
Bitcoin. What is Bitcoin?
The easiest way to define Bitcoin is to call it a “digital dollar.”
That’s really all it is — minus all the formal regulations that come with a bank (which is what makes it such a disruptive concept). It’s not a technology. It’s not a company. It’s your money, held in a digital form.
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How can you use Bitcoin? Why do people buy Bitcoin?
Some people buy Bitcoin because they want to store their money somewhere other than a bank. That’s all good, but take care of where you store your Bitcoin and other cryptocurrencies and digital assets. This can be a sensitive topic and the security of the crypto world needs to be talked about. Here are some newbie cryptocurrency mistakes to avoid. Spoiler: Don’t store your cryptocurrency, Bitcoin, Ethereum, digital assets, digital tokens, crypto collectables on a cryptocurrency exchange, except for when you are trading, selling or exchanging it. Store crypto in a wallet! Also, a good idea is to research some cryptocurrency exchanges and get started from there.
Some buy Bitcoin as an investment, hoping that the price will jump (once more) within a short period of time or in some years time. Here is where you can see people for what they are. They all call themselves crypto investors, but they really divide into two categories: long-term cryptocurrency investors and day-traders (just like the ones on the stock market). Of course, both ways are and have methods to increase your funds, but it requires a lot of research. Unless this isn’t your job, making money out of cryptocurrency is either a stroke of complete luck or not happening.
Others purchase Bitcoin as a means of investing in companies that raise money through an ICO since equity in those companies cannot be purchased with traditional currency. You can only purchase tokens with Bitcoin or Ether, which is Ethereum’s cryptocurrency.
The ones participating in ICOs are the true crypto enthusiasts or some who want a fast penny. But the year of fast-growing cryptocurrencies was 2017, and it is not coming back. AS time passes, the only true cryptocurrency projects remain and advance in their development. The others are thrown away into the pit of oblivion.
Ethereum is another cryptocurrency, and many people see it as a potential threat to Bitcoin as the dominant coin in the market.
What makes Ethereum different from Bitcoin is its technology, not the fact that it’s yet another cryptocurrency. Ethereum’s coin value is referred to as “Ether,”. Ether, just like Bitcoin, it can be is bought and sold on cryptocurrency exchanges, and used by investors to buy into ICO opportunities. So this is how Ethereum is similar to Bitcoin.
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But what is the difference between Ethereum and Bitcoin?
The difference between Ethereum and Bitcoin is the fact that Bitcoin is nothing more than a currency, whereas Ethereum is a ledger technology (a platform) that companies are using to build new programs.
Both Bitcoin and Ethereum operate on what is called blockchain technology, however, the Ethereum blockchain is far more robust. If Bitcoin was version 1.0, Ethereum is 2.0, allowing for the building of decentralized applications to be built on top of it.
In a nutshell: The Ethereum blockchain is great for innovation.
Furthermore, there is heavy support behind Ethereum’s technology in what is called The Enterprise Ethereum Alliance.
This is a super-group of Fortune 500 companies that have all agreed to work together to learn and build upon Ethereum’s blockchain technology — otherwise referred to as “smart contract” technology. In this case, “smart contracts” mean that demanding business applications can automate extremely complex applications.
What has so many people excited about Ethereum’s technology is its potential to impact projects and processes across all industries. It’s by no means a perfect technology yet, but it has opened the door for a wide variety of unique innovations.
Here is where the value of Ethereum is visible. Having all the functionalities of an improved blockchain compared to the Bitcoin blockchain, Ethereum has and it’s setting the pace for future blockchain opportunities, and it does so by offering this technology innovation to anyone willing to work with it. Ethereum is an open-source blockchain and gives its users to create their own open-source applications, also known as Dapps.