War of the CryptoCurrencies!
If you recently hopped on the blockchain bandwagon a couple of months ago then ‘Bitcoin’ was probably the first blockchain related term that you must have come across. However, Bitcoin is not the only cryptocurrency that exists. Many others have joined the list and the most notable one is Ether. It’s been identified that there is a great arms race in the world of cryptocurrencies and Bitcoin and Ether are currently the front-runners of this race.
Some of the technical differences between Bitcoin and Ether are:
- Smart Contracts
- A Faster Block Time
- Monetary Supply
- Mining Rewards
- Cost of Transaction
- Turing Completeness
The History of Bitcoin and Ether
Before we dive into the differences in detail, I think it’s important to know how both of these cryptocurrencies came into existence.
Bitcoin was invented by an individual that goes by the alias, “Satoshi Nakamoto”. This was the first great milestone for the blockchain technology. Even though the bitcoin was created in 2008, it has only started picking up speed and greatly increasing in value since last year.
The next big milestone was the blockchain itself. How? Well, this was when we realised that the cardinal technology that operates the Bitcoin can be extracted from the cryptocurrency itself and utilised as an open ledger that systematically authenticates and documents plenty of digital transactions. At the moment, Blockchain is being explored by every leading financial institution across the globe.
The third major milestone was brought to us by Ethereum which is a Blockchain technology that introduced the concept of ‘Smart Contracts’, the Ethereum Virtual Machine (EVM) and uses Ether, its cryptocurrency for peer-to-peer contracts.
The Smart Contracts can be authorised and checked through the decentralised element of the blockchain. This makes censorship and fraud especially challenging. Reducing the correlating expense and maintaining better security compared to the traditional contracts is the objective of the Smart Contracts by Ethereum.
A Faster Block Time
Ethereum is able to secure quicker confirmations thanks to the GHOST protocol that it implements. This results in an approximate 15 second average block time compared to Bitcoin’s 10 minute block time.
It has been projected that by 2018, 80% of all Bitcoin would have been mined, compared to Ether which would still be less than 50% in 2018.
Every 4 years, the reward for mining Bitcoins is halved and it is valued currently at 12.5 bitcoins. On the other hand, for each block, a miner is rewarded 5 Ether. This is determined by Ethash, Ethereum’s proof-of-work algorithm which promotes decentralised mining by people.
Cost of Transaction
On Ethereum, the completion cost for each transaction performed depending on factors like usage of bandwidth, complexity and memory requirements is called Gas. Whereas, in Bitcoin, transactions are constrained by the size of the block and they contend similarly with each other.
With adequate time and sufficient computing power, anything can be calculated thanks to Ethereum’s Turing complete internal code. This effectively grants the ability to implement complex logic.
In spite of the fact that Ethereum and Bitcoin may have comparative perspectives, the two currencies are exceptionally distinctive with respect to the utilisation and eventual fate of the two digital assets. Bitcoin is a more steady and dependable cryptocurrency as it has proven its value and level of security. Ethereum has its own built-in programming language, Solidity, distributed virtual machine and smart contracts which are capable of completing all sorts of tasks without the supervision of a central authority or third party entity. Hence, it is clear why Ethereum is no longer left out in the cryptocurrency conversation.
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