Bitcoin vs Ethereum: The close battle of cryptocurrencies

A cryptocurrency is a digital means of exchange, which, unlike other attempts to establish an electronic monetary system, incorporates cryptography principles, to guarantee security, decentralization and privacy.

Currently, Bitcoin has become the digital currency - or cryptocurrency - par excellence. He made his debut in 2009, and since then he has not been exempt from criticism and controversy. Its main attributes are its decentralization and not being backed by any government or bank. Ethereum, on the other hand, was created more recently, in 2013. Although both maintain similarities, we want to elucidate the keys where their main differences lie.

Although people tend to pigeonhole them into the same category, Bitcoin (฿) and Ethereum (Ξ) are actually two different protocols, one of their many uses or purposes being the exchange of goods and services as currency. However, if we focus on their common characteristics, both actually have a use as such, each with its own symbology and availability of software or web portfolios (wallets). Its use is registered in chains of blocks, they comply with the rule of double spending and whenever a transaction is made, it can not be reversed.

They can be used to pay, buy and store foreign currency as a store of value. When we refer to both as a protocol, it means that each one has special characteristics to perform communications and checks among its peers in the network, different to the traditional currencies.

Both use PoW (Proof of Work or "proof of work") in their checks. This makes possible the transfer of value directly between each of the participants of a transaction, without the need to depend on any mediating entity, whether banks or any other financial institution. Bitcoin uses a work test system for the creation of new currency units and to verify the validity of transactions. In the case of Ethereum, the work test consists of a consensus algorithm that to date has proven to be efficient, keeping the network completely secure, but apparently not sufficiently friendly with energy expenditure. Recall that, to more difficulty, more computing capacity, and therefore, more electrical cost. This technical detail makes the work to be done, moderately difficult (but feasible) on the client side, but easy to verify on the server side.