Are Bitcoin and Ethereum Really That Different?
Cryptocurrency is the newest trend in the money market with the use of digital currency; the biggest names in cryptocurrency being Bitcoin and Ethereum.
Bitcoin is the most recognized cryptocurrency across the globe. However, Ethereum also continues to get a lot of recognition hence becoming a huge competitor to Bitcoin.
Are Bitcoin and Ethereum Really That Different?
Many people have heard about Bitcoin, but its actual use is still very new. Ethereum being the newest development after Bitcoin, may even be more confusing.
To help you understand both the currencies better, we are going to look at the differences between the two kinds of cryptocurrencies in terms of technology, market and value growth, as well as mining.
Technology
Technological aspects are the main difference between the two forms of cryptocurrency. Bitcoin is simply known as digital dollar. It is a way through which people hold their money in a digital form. Bitcoin is just the concept of currency.
Ethereum on the other hand is more technology based and is described as a ledger technology. They both operate on a Blockchain technology. Ethereum is however stronger than Bitcoin in this aspect.
Bitcoin is seen as wallets used to store a certain amount of currency. Ethereum network is more innovative as it works to store computer code applications. This makes Ethereum more focused in terms of technology unlike Bitcoin which is focused in currency.
Innovation is the main driver behind Ethereum’s robustness, which is fueled even further with the *Fortune 500 companies, which have team up to build Ethereum’s Blockchain technology through an alliance called Enterprise Ethereum Alliance. These companies have merged together through a “smart contract” technology.
Ethereum has its own in-built currency called Ether. It is proven to be faster than Bitcoin as it grows in second unlike Bitcoins, which grow in minutes.
Market and value growth
In terms of market and value growth, both Bitcoin and Ethereum show positive growth as they continue to rise in value. The two are the most valuable cryptocurrencies as more people become more familiar with their usage and importance.
Bitcoin being the most recognized and understood form of digital currency, its value continues to rise every year. The rise is attributed to continuous investment whereby more and more people continue to invest in this digital currency with the speculations that its value will be worth a big fortune in the coming years.
The price of Bitcoin however fluctuates every day depending on its supply and demand. Its price and value is completely unpredictable as it can either go up or come down at any time.
Mining
In the network of cryptocurrency, mining is a process by which transactions are validated and added to the public ledger through a blockchain. Bitcoin mining takes place in a process whereby miners are required to solve difficult computation puzzles which become difficult day by day as many miners come to the market. A successful miner is then given a reward and earns extra Bitcoin points into their wallet.
Ethereum mining bears the same similarities as that of Bitcoin as they both undergo the same process. Just like in Bitcoin, Ethereum miners are also required to solve different computation puzzles, which become increasingly difficult. The success of a miner is based entirely on lack, and a successful miner is entitled to profits and rewards.
However, as innovations continue and Ethereum grows, it is evident that it would not require the mining process to validate transactions. Researchers are expected to come with a new validation process. The proof of stake algorithm will still work to protect transactions from tampering and it will be secured by token owners.
The popularity of both Bitcoin and Ethereum continues to be more notable as people are continuing to understand and use them.
However, these two types of cryptocurrencies show some similarities and differences in their purposes, market as value. As far as Bitcoin appears to be the most recognized across the globe, Ethereum which is a new development poses a big threat to it as some people even see it overtaking Bitcoin in the near future.
The whole point of this is however to bring to light that digital currency is currently the latest trend in the market.
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