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An Overview of Bitcoin vs. Ethereum

After bitcoin, Ether (ETH), the native cryptocurrency of the Ethereum network, is the second most popular digital token (BTC). Comparisons between Ether and bitcoin are natural given that Ether is the second-largest cryptocurrency by market capitalization (market cap).

In many ways, ether and bitcoin are similar: Each is a digital currency that can be traded on online exchanges and stored in various cryptocurrency wallets.

There are, however, numerous significant differences. While bitcoin is intended to be a currency and a store of value, the Ethereum network is intended to support complex smart contracts and decentralized applications.

Bitcoin:

Bitcoin was launched in January 2009. It introduced a novel concept outlined in a white paper by the enigmatic Satoshi Nakamoto—Bitcoin offers the promise of an online currency that is secure without the intervention of a central authority, unlike government-issued currencies

There are no physical bitcoins; instead, there are balances associated with a cryptographically secured public ledger.

Although Bitcoin was not the first attempt at an online currency of this type, it was the most successful in its early efforts. As a result, it has come to be known as the forefather of nearly all cryptocurrencies that have emerged in the last decade.

The concept of virtual, decentralized currency has gained acceptance among regulators and government bodies over the years. Although it isn’t a formally recognised medium of payment or store of value, cryptocurrency has managed to carve out a niche for itself and continues to co-exist with the financial system despite being regularly scrutinized and debated.

Ethereum:

The Ethereum Blockchain technology is being used to develop applications that go beyond simply enabling digital currency. Ethereum, which was launched in July 2015, is the largest and most well-established open-ended decentralized software platform being used in Mexc.

Ethereum enables building and deploying smart contracts and decentralized applications (dApps) without downtime, fraud, control, or interference from a third party. 

To achieve this, Ethereum includes its own programming language that runs on a blockchain. Ethereum’s potential applications are diverse, and they are powered by its native cryptographic token, ether (commonly abbreviated as ETH).

Ethereum held an ether presale in 2014, which was met with a resounding success.

Ether is primarily used for four purposes: it is traded as a digital currency on exchanges, held as an investment, used to purchase goods and services, and used to pay transaction fees on the Ethereum network.

Important distinctions

While both the Bitcoin and Ethereum networks are based on the distributed ledger and cryptography principles, they differ in many ways. Transactions on the Ethereum network, for example, may include executable code, whereas data attached to Bitcoin network transactions is only used to record transactions. Other differences include block time (an ETH transaction is confirmed in seconds, whereas a BTC transaction takes minutes), and their consensus algorithms: Bitcoin employs SHA-256, whereas Ethereum employs LMDGhost.

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