Introduction:
Cryptocurrencies are built on a complex system known as blockchain technology which is a dispersed ledger executed by a distributed network of computers. Digital currencies were created to become a mode of exchange digitally around the globe. Ethereum, a globally reckoned computing network runs on ETH or Ether cryptocurrency.
An overview on cryptocurrencies:
Popularly known as ‘digital’ currencies, cryptocurrencies are a form of digital asset structured on a network that is distributed across a huge number of computers. The decentralized structure permits these cryptocurrencies to exist outside the rule of governments or any central organization as such.
- ‘cryptocurrency’ is a term that is derived from the techniques of encryption used as a method to implement security in the entire network.
- An essential constituent of several cryptocurrencies is blockchain, which is an organizational method for certifying the security of the data that is being transacted.
- Cryptocurrencies permit secured payment online which are influenced in terms of digital ‘tokens’ and are represented by entries of ledger central to the system.
- Bitcoin was the first blockchain-oriented cryptocurrency which is still a valuable asset for thousands of businessmen and investors across the globe. Trading cryptocurrencies, especially Bitcoin, is not an easy task as it requires adequate techniques and strategies. Click bitcoinscompass.com to know more about trading.
An overview on Ethereum:
Ethereum is ranked as the most popular cryptocurrency just after Bitcoin. However, there is a basic difference between other virtual currencies and Ethereum as Ethereum is not just a medium of exchange globally but, it calls itself a decentralized computing network that is constructed on Blockchain technology.
- Ethereum is also powered by blockchain technology like other cryptocurrencies. People solve complex mathematical problems to ‘mine’ Ethereum and anybody who can come up with the solution of the problem first is rewarded with a token of Ether (ETH).
- Ether can be used for several exchanges like buying and selling of services. It is the digital currency for digital transactions while Ethereum is the blockchain network on which Ether can perform all the exchanges.
Difference between Ethereum and Bitcoin:
The only way Ethereum and Bitcoin differ is that while Ethereum is a registered technology that is used by businesses to create new programs, Bitcoin is just a currency.
- Transactions taking place in Bitcoin can take up to a few minutes which in the case of Ethereum just takes a few seconds. Therefore, the time of transaction varies a lot between Ethereum and Bitcoin.
- Ethereum uses the etash algorithm while in the case of Bitcoin, it uses the SHA-256 algorithm.
- Bitcoin was structured to become a mode of exchange for digital currencies and as a good store of value. On the other hand, Ethereum was built with the idea to enhance immutable, programmatic contracts and applications using a currency of its own.
- BTC (Bitcoin) and ETH (Ether) are both cryptocurrencies but, the main purpose of ether is to facilitate and monetize the process of the Ethereum smart contract and also decentralized application platform.
- As a ‘digital gold’, Bitcoin has attracted the attention of several investors because of its quality as a good mode of exchange and a store of value. Ethereum however, is like a utility-based digital currency. Due to its potential to back up smart contracts, Ethereum is predicted to develop a lot more in the future.
- While Bitcoin is mainly used as a currency for transactions, Ethereum is used to carry out different types of financial transactions, execute smart contracts and also collect data for the application of the party.
Conclusion:
The share of the market as claimed by Bitcoin has been falling dramatically in recent times while Ether has managed to make great price gains. Most business companies accept Bitcoin as a mode of exchange and several applications are now widely used and supported on the network of Ethereum.