Blockchain, Bitcoin, and Ethereum Explained
A large share of the crypto market is managed by both Bitcoin and Ethereum. The huge market share of both these cryptocurrencies compels people to set them against each other. But the fact is that both of them have different purposes and their own goals. In many ways, both of them complement each other too. Let’s have a deeper look at both of them along with their underlying technology.
What is Blockchain?
Blockchain technology is what backs up both Bitcoin and Ethereum. The information of both of these currencies is stored in each block of the blockchain and they are interconnected through chains. Every block will have the entire information about a group of transactions that took place within a certain period. With the change in time, the blocks will also change and new blocks will be added to the network. This is the reason why the technology is called Blockchain.
In short, a blockchain is a huge digital ledger that has a network of computers that are independent and maintains the transaction lists to be validated and checked.
What is Bitcoin?
Bitcoin was created in 2008 as a peer-to-peer digital transaction system. Thus, there is no third-party interference or governing bodies to control the transactions of bitcoins, while traditional currencies are controlled and managed by the central banks of the respective nations. So bitcoin is also considered to be the first-generation blockchain. There is a time interval of 10 minutes for the creation and verification of each block that is added to the bitcoin blockchain.
The creator of bitcoin has designed bitcoins in such a way that the total of bitcoins that will ever exist in the world is around 21 million. Miners get bitcoins as rewards for mining a block in the bitcoin blockchain.
What is Ethereum?
Ethereum was launched in 2014 and it has the credit of introducing Smart Contracts or a self-executing system. They are self-managing and their actions will be activated according to the situations like the end of expiration date or the maximum price. There are decentralized applications on the Ethereum network Ethereum to execute these actions. There will be different functions for each of these decentralized apps. Therefore, an Ethereum blockchain requires its native currency, ETH, for transactions. Thus, the Ethereum blockchain does not need manual inputs as it can modify everything on its own, which is why it is called ‘Smart Contracts’. Ethereum is commonly called the second-generation blockchain.
It takes just 10-20 seconds for the information in each block of Ethereum to be created and verified. Thus Ethereum is much faster than Bitcoin. There are also many ETC gambling websites that accept ETC as a form of payment. Moreover, using cryptocurrencies like ETC for online gambling can provide added privacy and security, as transactions are typically anonymous and decentralized. As there are multiple decentralized app networks working to implement different functions simultaneously, Ethereum has an appreciable speed. Ethereum does not have a maximum limit number like Bitcoin. Developers are behind a system that will ensure the value of Ethereum over time.
Final Thoughts Both Bitcoin and Ethereum play a vital role in the evolution and popularity of Decentralized Finance. Ethereum has used Bitcoin’s strength along with some improvements on the Ethereum blockchain which has brought more efficient functionality and speed. Bitcoin and Ethereum will be contributing largely to future financial processes.