Ethereum Vs Bitcoin: What Are The Differences Between These Two Technologies?

Since it was presented in 2014 by Vitalik Buterin, Ethereum continues to arouse enthusiasm among an ever wider audience. This technology is often compared to that of Bitcoin: it takes again the principle of a decentralization thanks to inscriptions in the blockchain, but goes further adding its own internal programming language, which will allow the developers to be able to conceive an infinity decentralized applications .

The valuation of these two currencies has experienced, in a different way, a very rapid growth. The Bitcoin ( BTC ), which was worth only a few cents in 2009, exceeded for the first time the bar of 6000 dollars in October 2017. Ether ( ETH ) experienced a spectacular increase in its price as of the end of January 2016, and its capitalization now exceeds 25 billion euros. If there are many other cryptocurrencies that have also generated excitement, it seems that the appeal for Ethereum is unprecedented. It is largely related to the application perspectives induced by this technology, which allows to imagine the design of marketplaces without any intermediaries and decentralized applications.

It must be kept in mind that the ether were not designed to offer yet another cryptocurrency, even if we can buy ethers for speculative purposes. They must be used to make payments as part of “smart contracts”, but also pay for people who bring the computing power of their machine Ethereum network. Ether facilitates and monetizes the smooth running of the Ethereum network by allowing developers to build and run decentralized applications (ĐApps).

The blockchain

If you want to understand how Bitcoin (electrum wallet bitcoin Lite fork) and Ethereum works, you must first understand Blockchain technology.

It is a kind of “big book” in which are recorded all the transactions made since the creation of the network . It is increasingly provided over time thanks to blocks that are added in a linear, chronological and time stamped way, allowing to have information on all the transactions operated on the network. This information is publicly available. The blockchain will allow many operations to be carried out with significant efficiency and minimized risks.

While Bitcoin and Ethereum both work through the principles of distributed consensus and cryptography, they are very different from a technical point of view, but also from the complexity of the applications that may result.

Bitcoin or the ancestor of crypto-currencies

The Bitcoin is the brainchild of the mysterious Satoshi Nakamoto whose bet was to offer a currency that is not issued by a centralized authority , allowing its users to benefit from reduced transaction costs.

It’s a virtual currency:  there are no physical bitcoins.

Bitcoin had the merit of introducing the concept of a digital currency. If some had doubts about security, you should know that bitcoin could never be hacked. Admittedly, some people have lost all their bitcoins, but this is due to a loss of their key or the failure of a trading platform rather than a fault inherent to the Bitcoin Blockchain (electrum wallet bitcoin Lite fork).  Today, crypto-currencies like Bitcoin we proved it was possible to propose an alternative payment system , which coexists with the traditional financial system.

What does Ethereum bring?

At first sight, the two systems are similar. They are both based on a cryptocurrency, and transactions are verified through a system that is based on proof of calculation, generating a remuneration of minors.

Except that by looking more closely, the differences are striking, not only in terms of how the use of the blockchain is used, but also in terms of application potential. If Bitcoin has changed the way we can now exchange value, Ethereum is likely to upset the way our companies work in the medium term.