After bitcoin, Ether (ETH), the Ethereum network’s cryptocurrency, is likely the second most popular digital token (BTC). Comparisons between Ether and BTC are only inevitable, given that Ether is the second-largest cryptocurrency by market capitalization.
In many ways, ether and bitcoin are similar: both are digital currencies that are traded on internet exchanges and held in various types of cryptocurrency wallets. Both of these tokens are decentralized, which means they aren’t issued or governed by a central bank or other governing body. Both make use of blockchain, a distributed ledger technology. However, there are a number of key differences between the two most prominent cryptocurrencies in terms of market capitalization. We’ll look at the similarities and differences between bitcoin and ether in more detail below.
In January of 2009, Bitcoin was launched. It introduced a revolutionary concept laid forth in a white paper by the enigmatic Satoshi Nakamoto: bitcoin promises to be an online currency that is secure and decentralized, unlike government-issued currencies. There are no “real” bitcoins; instead, there are balances linked to a cryptographically secure public ledger. Although bitcoin was not the first attempt at an online money of this type, it was the most successful in its early endeavors, and it has become renowned as a forerunner in some form to practically all cryptocurrencies established over the past decade.
Basics of Ethereum
Blockchain technology is being utilized to develop applications that go beyond just facilitating the use of a digital currency. Ethereum is the largest and most well-known open-ended decentralized software platform, having been launched in July 2015.
Ethereum allows smart contracts and decentralized applications (dapps) to be developed and run without the need for any downtime, fraud, control, or third-party interference. Ethereum includes a programming language that runs on a blockchain, allowing developers to create and execute distributed applications.
While both the Bitcoin and Ethereum networks are based on the distributed ledger and cryptography principles, they differ in many respects in terms of technology. Transactions on the Ethereum network may include executable code, but data attached to Bitcoin network transactions is often used merely to keep track of things. Other distinctions include block duration (an ether transaction is confirmed in seconds, whereas a bitcoin transaction takes minutes) and the methods used (Ethereum uses ethash while Bitcoin uses SHA-256).
However, in terms of their overall goals, the Bitcoin and Ethereum networks are vastly different. While bitcoin was founded as a substitute for national currencies and so seeks to be a means of exchange and a store of value, Ethereum was designed as a platform to enable immutable, programmatic contracts and applications through its own currency. Great facilitation in the case of Ethereum is the ability to mine currency via plug & play operating systems (such as simplemining.net)
Although BTC and ETH are both digital currencies, ETH’s primary goal is to make the Ethereum smart contract and decentralized application (dapp) platform more accessible and monetizable.