The key difference between Bitcoin and Ethereum is that Bitcoin is intended to primarily be used as a medium exchange, whereas Ethereum is intended to be a network where developers can build on and create functional applications.
We live in a world full of hundreds of different types of cryptocurrencies. Of them, the two biggest cryptocurrencies are Bitcoin and Ethereum. Bitcoin and Ethereum are somewhat similar but have several differences. Bitcoin is the earliest successful creation of a cryptocurrency, launched in 2009, whereas Ethereum is a cryptocurrency launched more recently, specifically in 2015.
CONTENTS
1. Overview and Key Difference
2. What is Bitcoin
3. What is Ethereum
4. Similarities – Bitcoin and Ethereum
5. Bitcoin vs Ethereum in Tabular Form
6. Summary – Bitcoin vs Ethereum
What is Bitcoin?
Bitcoin is a decentralized cryptocurrency that was first introduced in 2009. Bitcoin is a digital currency based on blockchain technology that can be used to purchase goods and services in the same way that the US Dollar can. Unlike other government-issued fiat currencies, Bitcoin is decentralized, which means that transactions are verified by several computers rather than by a single authoritative body. When compared to other standard online payment options, Bitcoin has a lower transaction fee.
Bitcoin transactions are confirmed by several nodes on the blockchain network through a process known as mining. In most regions of the world, Bitcoin is not considered legal tender, which means it cannot be used as a medium of exchange. However, the demand for Bitcoin is rapidly increasing around the world, as is the overall use of cryptocurrency.
What is Ethereum?
Ethereum is a decentralized platform based on blockchain technology. It is most commonly known for its cryptocurrency Ether, which is usually abbreviated to ETH. Just like Bitcoin, Ethereum is also decentralized, ensuring that all transactions are secure.
What makes Ethereum so innovative and different from Bitcoin is that it was the first platform to create and implement smart contract functionality. A smart contract is a computer program that is designed to automate the execution of legally binding events.
What are the Similarities Between Bitcoin and Ethereum?
Both Bitcoin and Ethereum are very similar as they are both blockchain-based, making them decentralized and secure. However, Bitcoin was the first to implement Blockchain technology, creating the precedence for Ethereum and other platforms to follow. They both have cryptocurrencies that can be used as a medium of exchange.
What is the Difference Between Bitcoin and Ethereum?
Although Bitcoin and Ethereum have some similarities, they have many differences. Ethereum has more functionality than bitcoin and has smart contract support, whereas Bitcoin is more utilized as a platform to store data. Furthermore, a transaction on Bitcoin could take a couple of minutes to be verified, whereas on Ethereum, it usually on takes a couple of seconds. The key difference between Bitcoin and Ethereum is their purposes and intended use. Bitcoin was created to be primarily used as a digital medium of exchange that can be used to purchase goods and services, whereas Ethereum was created as a platform for developers to build smart contracts and other applications.
The below infographic presents the differences between Bitcoin and Ethereum in tabular form for side by side comparison.
Summary – Bitcoin vs Ethereum
In conclusion, Bitcoin and Ethereum are very similar in the sense that they are both blockchain-based networks that can be used for several things. However, the key difference between Bitcoin and Ethereum is that Bitcoin is intended to primarily be used as a medium exchange, whereas Ethereum is intended to be a network where developers can build on and create functional applications.
Image Courtesy:
1. “Ethereum” By Stock Catalog (CC BY 2.0) via Flickr
2. “Coin-bitcoin-business-money” (CC0) via Pixabay