The difference between Bitcoin and Ethereum
When talking about the reasons why many people know the blockchain, many people will say that because of Bitcoin and Ethereum. Yes, while Bitcoin and Ethereum are known, understood, mastered, and applied by public, blockchain also become popular and one of the hottest technologies. What is the difference between Bitcoin and Ethereum? Today we conduct a careful analysis.
Definition:
1. Similarities
Both Bitcoin and Ethereum are successful and representative blockchain technology applications. Blockchain technology appears because of Bitcoin, and Ethereum lets us know that blockchain can exist independently. Not only Bitcoin can have blockchain technology, but also Ethereum opens the idea of blockchain world. These are peer-to-peer network nodes, public ledgers, and consensus-based algorithms, mainly through mining. The network is maintained.
2. Difference
Bitcoin is a peer-to-peer digital payment system, similar to a bank that can be settled globally. This bank has the basic principle of code and consensus. The bank's settlement or issuing currency is called bitcoin and this bank is also called bitcoin. The most important thing is that the bank's ledger are completely public. Anyone can view every transaction and record, and each transaction can be traced back to the source. And the ledger cannot be changed because of encryption. And the biggest feature of Bitcoin is peer-to-peer value transmission and it does not require other third parties or trust institutions.
Ethereum is a peer-to-peer decentralized virtual machine. Every computer can be a node, a virtual machine of Ethereum as long as the Ethereum client is installed. Therefore, if the entire scale of the Ethereum system is further developed, it can be said that it is global supercomputer systems, and everyone can develop programs to run on this supercomputer. The peer-to-peer network feature is that even if several nodes are offline or attacked, the entire system can still run while other nodes are running, and the anti-risk and anti-error is very high. Therefore, from the bottom-level definition, Bitcoin solves the problem of world currency. There is no additional currency, no cancellation or confiscation of your property, but it exists directly on the Internet and is completely kept by you. Ethereum is a global supercomputer that provides the underlying system. The future Ethereum may be the underlying basic resource like electricity.
Technology:
Bitcoin is a peer-to-peer digital currency system. The entire system is based on the UTXO trading model, with a focus on the layout and recording of transactions and data structures. Ethereum is a virtual machine that focuses on executing contracts in a contractual model. So Ethereum is based on the Account model. Although Ethereum has learned a bit from bitcoin basis, it has also created a new model that provides ideas for later developers, while the latter developers are basically choosing one of these two modes as their own application mode.
In other technologies, the hash and the proof of work are different. Bitcoin is based on the miner's calculation of the only correct hash value to prove the workload to obtain the bookkeeping package block right, so as to get the reward, this is the proof of the workload. Ethereum hopes to optimize this work. Because this model of bitcoin mining is more concentrated, so there is emergence of professional mining machines, which is more wasteful of electricity and social resources. Proposing an equity proof mechanism can avoid power concentration and waste of resources. Now Ethereum has a hybrid of two mechanisms, with different proportions, and gradually transitions to the full Pos mechanism.
Other aspects:
The inventor of Bitcoin is called Satoshi Nakamoto, and still unknown identity. The founder of Ethereum is Vitalik Buterin, a Russian born in 1994. Since childhood, he has been a clever person and has a name of small prodigy.
Bitcoin began in 2009, and Ethereum published white paper in 2013 and began in 2014.
As token, Bitcoin and Ethereum are also very different:
The currency issued by the Bitcoin system is called Bitcoin, and the currency issued by the Ethereum system is called Ethereum. Why is token for blockchain application? Not all blockchain applications have to issue tokens. This is not a requirement. Why is token appearing? because it is used for internal system settlement, maintenance, and rewards. Take the entire system of Ethereum for example, every contract account initiates a certain contract, the entire network checks the whole process of the operation, and the miners need to pay the power and electricity. The token is remuneration for their work.
The total number of bitcoins is 21 million, issued in the form of mining, one block every 12 minutes, each block rewards 50 bitcoins, and four years later it reduced to 25, until 2140 all are dug up. Ethereum does not set a general online, but the number of issues each year is fixed, and the number issued each year is 0.3 times the total amount of pre-sold Ethereum. Although Ethereum releases a fixed amount of Ethereum each year, the rate of increase in monetary aggregates is not fixed. The Ethanol inflation rate is declining every year, making Ethereum a currency that is resistant to inflation. Anti-inflation is a special case of inflation, and the inflation rate is declining every year.
Through the above introduction, we have a deeper understanding of the two most popular cryptocurrencies. In fact, the entire system of Ethereum and Bitcoin is open source, and there is no other way to intervene in specific algorithms. For the future development, these two currencies will bring us new and bigger surprise.
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