ETHEREUM & BITCOIN: Two Different Specialities

Today we won't discuss about which is better ETH or BTC . This post is about individuality of both . We will see how different they are with each other and yet beautiful and beneficial on their own . Let's dive deeper to know how can they compliment each other when used wisely . Let's know the differences.

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Transaction speed is the amount of transactions done per second in any cryptocurrency.
Bitcoin's transaction speed(4 to 7 transactions per second) is slower than Ethereum(15 transactions per second) and it uses more energy due to its PoW consensus mechanism.

While Ethereum has higher transaction activity due to its functionality, its adoption rate is not as high as Bitcoin. However, Ethereum's supply is not limited like Bitcoin, which can lead to inflationary issues.

Change and growth are constant with Ethereum, known as ETH (ticker symbol). Its official name as a coin is Ether.

Both are digital assets, but they are intended to serve different purposes and have unique features.

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Bitcoin is sometimes called DIGITAL GOLD due to its perceived scarcity and durability. Bitcoin transactions are primarily monetary, with blocks being added to the blockchain approximately every 10 minutes.

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It is a decentralized platform that enables the development and execution of smart contracts and decentralized applications (dapps), with its native digital asset. Ether is used to power these functions. Blocks on the Ethereum network are added approximately every 15 seconds, which aims to facilitate faster transactions than Bitcoin.

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Some fundamental differences make them practically and conceptually distinct from each other. Let’s dig deeper to learn more about Bitcoin vs Ethereum.

Verification And Distribution Storage

To achieve this, Ethereum builds on the concepts we saw with Bitcoin.
Bitcoin is trustworthy for has verification and distributed storage of (transactional) data while Ethereum has verification , distributed storage and processing of data and logic.
Ethereum has a public blockchain running on about 15,000 computers and the token on the blockchain is called Ether, which is currently the second most popular cryptocurrency.

EVM

EVM can run smart contracts. When you download and run the Ethereum software, it creates and starts a separate virtual computer on your machine called the 'Ethereum Virtual Machine' (EVM).

This EVM processes all Ethereum transactions and blocks, and keeps track of all account balances and results of smart contracts. Each node on the Ethereum network runs the same EVM and processes the same data, resulting in all of them having the same view of the world. Ethereum can be described as a replicated state machine because all nodes running Ethereum are coming to a consensus about the state of the Ethereum Virtual Machine.

Consensus Algorithms

Bitcoin uses Proof of Work (PoW), in which miners use sophisticated equipment to individually verify blocks and add them to the chain. Essentially, this means that the energy required to mint ETH is much less than the energy required to mine BTC .

Scalability

Scalability is, in a way an extension of the differences in consensus algorithms.

Future prospects

Ethereum forms the foundation of dApps, which are decentralized applications that are extremely popular and beneficial.

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Blockchains like Bitcoin and Ethereum form the base of the crypto world.
Despite their differences, Bitcoin and Ethereum are not necessarily competitive. They aim to serve different purposes and can complement each other. Bitcoin can be used as a store of value and a stable asset, while Ethereum can be used to interact with applications built on the Ethereum blockchain. In a portfolio, Bitcoin can be used to preserve value while Ethereum can be used to access decentralized financial (DeFi) services.

India, 30.04.2024
@moyeon