Even though Bitcoin has been the more dominant cryptocurrency in the digital currency world, it’s definitely the only one in there. Ethereum is another cryptocurrency-related project that has been gaining more and more popularity due to its additional features and applications.
In this article, we’ll talk about the differences between the two giants in the world of cryptocurrencies by mainly discussing their features. If you’re planning to invest soon in digital money, this is your chance to learn more about the investment you’re about to make.
Ethereum is not only about money
The very first thing about Ethereum is that it’s not just a digital currency. It’s a blockchain-based platform or network that is multi-layered and has many aspects. Arguably the most popular among its features are smart contracts, the Ethereum Virtual Machine (EVM), and ether, which is its own currency it uses to facilitate peer-to-peer contracts.
Ethereum’s smart contracts use blockchain stored applications for contract negotiation and facilitation. The good thing about smart contracts is that they give decentralized way to verify and enforce the terms and conditions of such contracts.
Since it is decentralized, it’s nearly impossible for any form of fraud or censorship to occur. Ethereum’s smart contract’s goal is to offer greater security than the conventional contracts as well as to lower the associated costs with every traditional transaction.
The smart contract runs with ether, which is the blockchain-based cryptocurrency. Ether and other crypto-assets can be held in the Ethereum Wallet, which enables users to create and use smart contracts.
Smart Contracts and Your Own Currency
Ethereum enables you to create your own digital tokens which you can use to represent virtual shares, assets, proof of membership, and more. These smart contracts are compatible with any wallet and they’re just as compatible with exchanges that use a standard coin API.
You can copy the code from Ethereum’s website and then use your digital tokens for a flood of purposes, such as representations of shares, forms of voting, and also fundraising. You can either have a fixed amount of tokens in circulation or you can have a fluctuating amount depending on predetermined guidelines.
The Key Differences
There are many other smaller aspects in which Ethereum differ from Bitcoin. Bitcoin’s average block time is about 10 minutes, while Ethereum tries to be 12 seconds. This very quick time is thanks to Ethereum’s GHOST protocol. Faster block time means that the confirmations are also faster. On the other hand, there will also be more orphaned block.
Another huge difference between them is their monetary supply. Over two-thirds of all available Bitcoin have already been mined, with the larger slice going to the early miners. Ethereum raised its launch capital with a presale and only about half of its coins will have been mined by the fifth year.
The reward for mining Bitcoin is divided into two about every four years. On the other hand, Ethereum rewards miners based on its proof-of-work algorithm called Ethash, with 5 ethers being given for every block confirmed.