Inspiration is all around us. We just need the right attitude and hard work to make our dreams come true. For Vitalik Buterin, the dream was to revolutionize the financial world with a creation that he was inspired from with the use of Bitcoin. It really goes to show us the lengths of how well something that can inspire you to create something good.
Cryptocurrencies have changed the face of the financial world by a lot. We’ve hit milestones in the development of software that is highly advanced and useful, achieving that it is very easy for us to say that we’re finally in the future.
What started off as a pure science, the world of cryptocurrency has people moving left right and center given how well it seems to have a magnetic connection with the ones that want to trade it all over the world. It is very likely that all our finances will become virtual and digital that we might not even need to carry money with us anymore.
It is highly likely that all we’d need soon is a device such as a phone or a watch to carry out our transactions. Believe us when we say it, the future is here. Visit this website to know the latest news about cryptocurrency and how it changes in price every now and then.
In this article, we’ll talk about Ethereum and Bitcoin and how they are different from one another. With that being said, without any further ado, let’s get into this!
First of all, what you need to understand is that Ethereum is more than just a blockchain and cryptocurrency. It is a whole ecosystem of applications, services and businesses and I guess economies as well. To keep it simple though, you can think of Ethereum as made up of five key things.
The Ethereum blockchain, the Ethereum virtual machine, the cryptocurrency Ether, smart contracts and dapps and of course, the digital tokens. Number one, the Ethereum blockchain is more advanced than Bitcoin, much like Bitcoin Ethereum uses a proof of work blockchain to power the network. Everything that happens on Ethereum is recorded on this blockchain.
It is the backbone of the Ethereum network. However, unlike Bitcoin, the Ethereum blockchain also includes snippets of code as well as transactional data. This makes it more advanced than Bitcoin and allows for it to interact with things like smart contracts and decentralized applications (dapps).
Doing so enables the blockchain to interact with data on the other backbone of Ethereum, which is the Ethereum virtual machine also known as the EVM.
Number two, the Ethereum virtual machine aka “The World Computer”. The EVM is kind of like a massive global computer run by all the nodes on the Ethereum network, it allows Ethereum to run entire applications, just like you would find on your computer, smartphone or on the internet.
These applications by nature are decentralized and therefore known as dapps decentralized applications. Ethereum is able to do this, because its programming language, called Solidity, is Turing complete. This means that Ethereum can add an extra layer of functionality, that something like Bitcoin, cannot. This has earnt Ethereum the reputation of being like a decentralized internet or a world computer.
The next thing to understand is what people are talking about when they talk about the price of Ethereum. But when they do, what they are actually talking about is the price of the cryptocurrency named Ether, also known by its stock price, ETH. Ether is the native cryptocurrency of the Ethereum network and is used in most operations on Ethereum.
Its goal is to regulate the activity on the network. On one side, it incentivizes miners and node operators with rewards for running and securing the network. Much like how Bitcoin rewards miners with new Bitcoin. Well, on the other side, users and developers are charged Ether for actually using the network, sort of like a toll on a highway or like putting gas into your car.
That means Ether is spent every time someone uses the Ethereum network.
Token Structure Similar To Bitcoin
Tokens are a multi billion dollar industry. So finally, one of the most famous components of Ethereum is tokenization. Ethereum introduced the concept of cryptocurrency tokens, which is like adding a digital currency on top of the network.
Tokenization allows anyone to create a new digital currency known as a token using the Ethereum blockchain. Tokens are created for any number of reasons. Often they are used in conjunction with dapps as a sort of currency specific to that application.
Sometimes they’re used as a mechanism for fundraising new blockchain projects via initial coin offerings, you know, commonly known as ICOs. And other times they are just created, just because.
A cryptocurrency that no one needs an introduction to. We gave a larger explanation of Ethereum because it can be a lot harder to understand that than Bitcoin. Which is why we’re saving Bitcoin for a shorter and more concise explanation for now.
Bitcoin was created by a group of people or one person on the internet masquerading with a pseudo-anonymous name called Satoshi Nakamoto. ‘They’ essentially laid down the ground principles for the creation of a financial instrument that had only a virtual presence with no trace in the real world. It could be traded with real money but only remained on the virtual platform.
It is governed by the laws of cryptography that fully encrypt the data flowing from one place to another with visibility for only the sender and the receiver. It is the most valued cryptocurrency in the world making it the king of the current market.
Bitcoin is valued a lot more than Ethereum as of the moment. It has had exponential growth and will continue to do so. It is the most traded cryptocurrency in the world, on its way to becoming the first adopted currency for many nationalities.
Ethereum has greater growth potential than Bitcoin. This is mainly because of the design of Ethereum and its applications. Bitcoin is a mere cryptocurrency, but Ethereum is an entire platform that can be used to do various things in the future.
The mining speed of Ethereum is much faster than that of Bitcoin. This is because Bitcoin has existed for years before and is coming to its maximum supply which is why the mining process is a lot slower and lower yielding than compared to ethereum.