Bitcoin was created by Satoshi Nakamoto in 2009, and today it has become the most important cryptocurrency globally. Its main characteristic is its decentralization and its base on blockchain technology. Ethereum, for its part, was created in 2012 by several developers, standing out among them Vitalik Buterin. They tried to change the world of cryptocurrencies with the launch of smart contracts.
Currently, Bitcoin tends to compete against gold and existing fiat money to replace it with a global currency. At the same time, Ethereum, for its part, innovates with so-called smart contracts, which are digital agreements between parties. In other words, what Bitcoin does with the money, Ethereum does with contracts. Next, we will mention some of its most notable differences:
Bitcoin is a currency that was created to compete against the gold standard and Fiat money. In the case of Ethereum, its purpose is to become a token capable of facilitating smart contracts between the parties involved in a transaction.
Division or fractions
When dividing the currency into decimal parts, each one has its allocation; in Bitcoin, its parts reach 8 decimal places, its smallest fraction is known as Satoshi, while Ethereum has 18 fractions, and the smallest unit is known as Wei. In Bitcoin, the parts or divisions are called millibitcoin, microbitcoin, and its smallest part is called Satoshi, in honor of its creator. In Ethereum, the parts are named Finney, Szabo, Shanon, Babbage, Lovelies, and the smallest part is named Wei.
Your security systems
Each currency has its own security system in the form of an algorithm; thus, it maintains strength at cryptographic levels. As for Bitcoin, it has the SHA-256d algorithm, while Ethereum has the EtHash algorithm.
Time per transaction
The transaction time is when each cryptocurrency is used for each block to confirm the transaction and validate it by a miner. In Bitcoin, the time used to confirm and validate a transaction and add it to the blockchain is approximately 10 minutes. At the same time, Ethereum requires approximately 16 seconds for such action.
Prize for mining
Bitcoin uses an adjustment called Halving that is decreasing, divided every 4 years, every 210,000 blocks, initially it was 50 bitcoins, then 25 bitcoins, and finally, it went to 12.5 bitcoins. Ethereum has a constant prize for each mined block of 5 Ether in a fixed prize way.
The amount of coins
The number of coins is one of the most notable differences; for Bitcoin, the issuance is limited. It will reach 21 million issued coins, and its system is inflationary; each time, one unit should have more value. On the other hand, Ethereum does not have this problem since its emission is unlimited, and its system is deflationary; the more coins generated, they will have less value.
Each block collects or records each new transaction that is made at the time. For Bitcoin, the size of its block is limited to 1 Mb. It records the transactions that take place after approximately 10 minutes, while Ethereum does not have a limit when it comes to its block size and records the last 16 seconds’ transactions.
What do you think about this topic? Are there any other differences between Bitcoin and Ethereum that you would like to mention?
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