Bitcoin or Ethereum: What’s the difference?

Cryptocurrencies and blockchain technology remain a mirage for a large percentage of the global population. 

As a novel technology, people naturally would find it difficult to comprehend and most times would want to challenge the ethics around its implementation. Most of the global world leaders initially downplayed the effectiveness of blockchain technology several years ago but the dynamics have changed in recent years. Cryptocurrencies have a range of benefits, but an understanding of the technology driving their implementation is one of their most fundamental characteristics.

What is Bitcoin?

The creation of Bitcoin by Satoshi Nakamoto using blockchain technology should be termed the 11th wonder of the world (smiles) as this has basically transformed the entire world in over a decade. It is a peer-to-peer digital currency that can be sent from user to user without the involvement of a central bank or administrator. Known as mining, bitcoins are created as a reward for the mining process. They can be exchanged for other currencies, products, and services that are accepted globally. Bitcoin's smallest unit is the satoshi (sat), which is named in honor of Bitcoin's creator. The unit can be expressed as 1*100000000 (one hundred millionths) Bitcoin, which is also referred to as a satoshi.

Bitcoin addresses are registered to Bitcoins, so creating a Bitcoin address consists only of picking a valid private key and computing its corresponding Bitcoin address. This computation can be done in a split second. But the reverse, computing the private key of a given bitcoin address, is practically unfeasible. Such that users can tell others or make public a bitcoin address without compromising its corresponding private key. Bitcoin is totally decentralized and as such possesses these key features:

  • Bitcoin does not have a central authority.

  • The Bitcoin network is peer-to-peer and without central servers.

  • The network also has no central storage thereby making the Bitcoin ledger distributed.

  • The ledger is public so that anybody can store it on a computer.

  • There is no single administrator as the ledger is maintained by a network of equally privileged miners.

  • Anyone can become a miner.

  • The additions to the ledger are maintained through competition. Until a new block is added to the ledger, it is not known which miner will create the block.

  • Anybody can create a new Bitcoin address

What is Ethereum?

Ethereum is a decentralized, open-source blockchain with smart contract functionality. Ether (ETH) is the native cryptocurrency of the platform. Amongst cryptocurrencies, Ether is second only to Bitcoin in market capitalization.

Anyone can deploy permanent and immutable decentralized applications on the platform, with which users can interact. Applications of decentralized finance (DeFi) provide a wide range of financial services without the need for typical financial intermediaries such as brokerages, exchanges, or banks, such as allowing cryptocurrency users to borrow against their holdings or lend them out at interest.

Ethereum also allows for the creation and exchange of non-fungible tokens (NFTs), which are tokens connected to digital works of art or other real-world items and sold as unique digital property. Additionally, many other cryptocurrencies operate as ERC-20 tokens on top of the Ethereum blockchain and have utilized the platform for initial coin offerings.

These are some of the basic developments on the Ethereum blockchain that have given rise to massive use cases in a wide variety of ways. 

The awesome news about the cryptocurrencies mentioned above is that they can be traded on the Klever Exchange and can also be stored on the Klever Wallet. We would like to encourage our users and prospective investors to create their own wallets on the Klever platform for faster transactions.

It is a Klever thing to do.

James Enajite
Klever Writer

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