Critical differences between Bitcoin and Ethereum

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Undeniably, there is no neck to neck competition between bitcoin and Ethereum in terms of market value, but the future use case of Ethereum is much more proficient. The technology used by both digital currencies is nearly similar to each and easy to understand. Bitcoin was discovered in 2009 by an anonymous developer, Satoshi Nakamoto. With the plenty of differences between both currencies, tons of similarities are also present.

Both currencies can be traded in online exchange and can be stored in the crypto wallet as well. Ether and bitcoin are the most popular digital currencies that don’t exist physically, which makes them different from the currency created by the higher authorities. The best part of conducting a transaction through digital currency is that there is no government intervention in any transaction. To know more about trading you can visit this website called Ethereum trader.

Ethereum is a blockchain network used to deploy decentralized applications, NFT games, etc. It was discovered in 2015, whereas ether is the cryptocurrency that acts as fuel for performing a task on the Ethereum platform.

Ether was firstly introduced in the market as a presale event conducted in 2014, which remains genuinely successful. According to the perspective of the Ethereum platform, Ethereum can be used by people to make transactions or payments and invest assets all over the world. Below mentioned are some fundamental distinctions between these famous digital currencies.

Cryptography

It is a fact that both Ethereum and bitcoin use cryptography or the ledger system for powering the system, but the technical working difference in the same technology in both is different from each other. The data attached with the transactions related to bitcoin is usually used to keep some records regarding the transaction.

There is also a time-related difference present between both Ethereum and bitcoin. Ethereum offers a fast speed of transaction to its users in contrast to the time taken by bitcoin to complete the transaction.

Ether will complete the transaction in a few seconds only, whereas bitcoins will take some minutes to proceed with the transaction. The algorithm on which both these technology runs is also different from the technology of each other. SHA-256 and Ethash are used for bitcoin and Ethereum, respectively.                    

Consensus protocol

Ethereum and bitcoin follow a similar consensus protocol which is proof of work. Proof of work refers to a concept in which they are allowed to state or record every data with the help of a blockchain. It refers to stating information on the blockchain by using nodes of the respective network.

It will help avoid numerous types of cyber or economic attacks on the network they are using. Next year, Ethereum is getting an upgrade to the succeeding stage, proof of stake. After reaching this protocol, Ethereum will get its Eth2 upgrade.

This protocol will help Ethereum in becoming more valuable, secure, and maintainable, whereas bitcoin will continue with proof of work. So you can also differentiate Ethereum and bitcoin based on consensus protocol.

Overall aim

Along with the above two differences, we can also differentiate bitcoin and Ethereum based on the overall objective for which they both are developed and created. It is well-known that bitcoins were created as an alternative for conducting the day-to-day type of transaction, a primary function performed by the fiat currency.

It has been created for relocating the centralized power from0 fiat currency to decentralized power of virtual currency like bitcoin. So, bitcoin can be used by people to make payments in exchange for goods and services, or you can also invest money in BTC. On the other hand, Ethereum is used to deploy some intelligent contracts or any decentralized application with the help of its currency, ether. So, the primary objective of both bitcoin and Ethereum is genuinely different from each other.

Digital gold and digital silver

Bitcoin is considered digital gold by the public. It is the primary digital currency that has gained this much popularity worldwide. The market cap of bitcoin has crossed the value of 1 trillion US dollars. On the other hand, Ethereum is considered digital silver because it is the second most popular cryptocurrency used for numerous different purposes.

The above-listed portion explains the prominent distinction between the leading digital currencies.   

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