Comparing Etherium and Bitcoin
There has been a lot of rage about crypto currencies recently.
There has been a lot of news going around Bitcoin and other crypto currencies in the past few weeks. The prices have skyrocketed, the early buyers have made huge percentages (in the thousands), on their investments. But what happens when you buy a crypto currency? What are you actually buying and how are these currencies different? I will be looking in depth on the now household names of Bitcoin and Etherium.
Bitcoin is a form of digital currency, created and held electronically, but no one country controls it, it is decentralized. This puts some people at ease, because it means that a large bank can’t control their money.
Bitcoin stores details of every single transaction that ever happened in the network in a huge version of a general ledger, called the blockchain, which tells all.
Bitcoin isn't printed like dollars but rather produced by computer's. The computer's who produce Bitcoin solve increasingly hard mathematical problems. The computers involved in Bitcoin mining are in a sort of computational race to process new transactions coming onto the network. The winner gets a chunk of new Bitcoins, 12.5 of them right now.
There is generally a new winner about every 10 minutes, and there will be until there are 21 million Bitcoins in the world. At that point, no new Bitcoins will be created. This cap is expected to be reached in 2140. So far, about 16 million Bitcoin have been distributed.
Pricing and Spending
While, Bitcoin has been associated with illegal or criminal activities, because anyone can open a Bitcoin address and start sending and receiving Bitcoins without giving a name or identity. There is no central authority that could collect this information, given the blockchain foundation and the anonymity that users like.
The price of Bitcoin fluctuates constantly and is determined by open-market bidding on Bitcoin exchanges, similar to the way that stock and gold prices are determined by bidding on exchanges. Most recently people are buying and selling Bitcoins on exchanges, speculating on future prices, and high-frequency traders have started up around Bitcoin.
How is Etherium different
Ethereum blockchain focuses on running the programming code of any decentralized application. Ethereum also can handle much more complexity, thanks to its "smart contact system", that is based on.
In the Ethereum blockchain, instead of mining for bitcoin, miners work to earn Ether, a type of crypto token that fuels the network. Beyond just a tradeable currency, Ether is also used by application developers to pay for transaction fees and services on the Ethereum network.
The genius behind Ethereum, Vitalik Buterin, created a virtual machine for the blockchain (EVM). It allows for developers to easily run any program regardless of programming language on the EVM. The EVM also allows the process of creating other blockchain applications much easier than before. Instead of having to build an entirely original blockchain for each new application, which is extremely hard, Ethereum enables the development of potentially thousands of different applications all on one platform.