Many of you will have already heard of cryptocurrency Bitcoin, but there has been a lot of press lately about Ethereum that’s getting crypto miners and investors excited. One thing we have found is that there’s some confusion about the difference between the two cryptocurrencies which we will aim to outline in this post.
For a start, Bitcoin has been around for a little bit longer, since 2009. Ethereum, by comparison, is a relatively new kid on the block after only going live in 2015. Both have experienced tremendous growth since their launch with prices on the stock market inflating massively.
Bitcoin was designed to be a payment system and digital asset that would allow people to transfer funds on a peer-to-peer basis without the need for any intermediary, such as banks. It was the first of its kind and has since been the inspiration for a number of different cryptocurrencies that have since entered the market. However, they don’t all have the same purpose.
Ethereum was created for an entirely different purpose, although it does use blockchain technology just like Bitcoin. Rather than a currency to be transferred between peers in place of card transactions, coins and notes, Ethereum is actually a programmatic platform that allows users to create ‘smart contracts’ using Ether as the currency.
Ethereum uses are quite wide and varied. Smart contracts utilize blockchain applications for the purposes of negotiating contracts and facilitation.
The blockchain provides users with a decentralized way to verify and enforce them, which is a major benefit. For one thing, this makes it incredibly difficult for fraud or censorship to take place, providing greater security than a traditional contract and it’s also more cost-effective.
In fact, the similarities between the two actually end at the fact that they are both a cryptocurrency. Apart from that their uses are quite different. Ethereum has long been touted as Bitcoin’s biggest competitor, but it could well be the case that there’s enough room in the marketplace for both cryptocurrencies to succeed.
The only question left to answer is, which one will be worth more in a few years time?