Difference Between Bitcoin and Ethereum
Bitcoin is a digital currency that can be transferred on a peer-to-peer (P2P) network without the need for any central authority. It was invented by a person or group of people with the name Satoshi Nakamoto in 2008. All the transactions are stored in an immutable distributed ledger.
- Bitcoin is created, stored, transacted, and distributed using a decentralized, distributed system known as Blockchain.
- A public ledger records all the transactions of the Bitcoin and copies are retained on all the servers around the world.
- It is not necessary to buy an entire bitcoin, one can buy only a fraction of it if that is all necessary.
- BTC is the abbreviation for Bitcoin.
What is Ethereum?
Ethereum is a blockchain-based distributed platform. The network currency of Ethereum is known as Ether (ETH). Here also, the transactions are stored in an immutable distributed ledger.
- Ethereum is designed to be scalable, decentralized, and programmable.
- It provides a flexible platform to build applications using the solidity scripting language.
- Transactions are sent and received in user-created Ethereum accounts.
- It is a blockchain-based platform With the cryptocurrency Ether(ETH).
Bitcoin vs Ethereum
Bitcoin and Ethereum have many similarities but there are some long-term different visions and limitations that make them two different blockchain networks that have their pros and cons and are suitable for varying user requirements. Below are some of the differences between Bitcoin and Ethereum:
|Definition||Bitcoin (abbreviation: BTC; sign: ₿) is a decentralized digital currency that can be transferred on the peer-to-peer bitcoin network.||Ethereum is a decentralized global software platform powered by blockchain technology. It is most commonly known for its native cryptocurrency, ether (ETH).|
|History||The word bitcoin was defined in a white paper published on 31 October 2008. The currency began use in 2009.||Ethereum was conceived in 2013 by programmer Vitalik Buterin, and then went live on 30 July 2015.|
|Purpose||The purpose of bitcoin was to replace national currencies during the financial crisis of 2008.||The purpose of Ethereum was to utilize blockchain technology for maintaining a decentralized payment network and storing computer code.|
|Smart Contracts||Although bitcoin do have smart contracts, they are not as flexible or complete as Ethereum smart contracts. Smart contracts in Bitcoin does not have all the functionality that a programming language would give them.||Ethereum allows us to create smart contracts. Smart contracts are computer codes that is stored on a blockchain and executed when the predetermined terms and conditions are met.|
|Smart Contract Programming Language||Smart contracts on Bitcoin are written in programming languages like Script, Clarity.||Smart contracts on Ethereum are written in programming languages like Solidity, Vyper, etc.|
|Transactions||Generally, bitcoin transactions are only for keeping notes.||Ethereum transactions may contain some executable code.|
|Hash Algorithm||Bitcoin runs on the SHA-256 hash algorithm.||Ethereum runs on the Keccak-256 hash algorithm.|
|Consensus Mechanism||The Proof-of-Work (PoW) is the consensus mechanism used by the Bitcoin network.||The Proof-of-Stake is the consensus mechanism used by Ethereum.|
|Block Time||The block time of bitcoin is 10 minutes.||The block time of Ethereum is 14 to 15 seconds.|
|Block Limit||The bitcoin blockchain has a block limit of 1 MB.||The Ethereum blockchain does not have a block limit.|
|Popularity||Bitcoin is the most popular digital currency in the market to date.||Ether, native currency of Ethereum is the second-largest cryptocurrency after bitcoin to date.|
|Energy Consumption||Energy consumption is very high.||Energy consumption is very low as compared to bitcoin|
|Energy Consumption rate||Energy consumption rate of bitcoin mining system 3.2 Million household.||Energy consumption rate of bitcoin mining system 1.2 Million household.|
|Structure||Structure of bitcoin is simple and robust.||Structure of Ethereum is complex and feature rich|
|Rewards||Miner got nearly 6.25 BTC on successfully adding new block in network.||Miner got nearly 5 BTC along with same additional rewards on successfully adding new block in network.|
|Assets||Assets of Bitcoin is BTC.||Assets of Ethereum is Ether.|
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