How is Ether Different From Bitcoin?
The Basics: What is Ethereum?
Ethereum is the world’s second-largest cryptocurrency technology by both market capitalization and price after Bitcoin and blockchain and has gained tremendous value in 2021. Developed by Vitalik Buterin in 2013, Ethereum is decentralized and an open-source blockchain with the functionality of smart contracts. Just like Bitcoins, Ether (ETH), the native cryptocurrency token of the Ethereum blockchain has a volatile nature, fluctuating around the market trends. Are you ready to dive into Ethereum trading? Start with the official profit revolution app.
A well-established and open-ended decentralized software platform, Ethereum is the technology that allows the deployment of smart contracts and applications to run without any form of control, fraud, interference from third parties, and downtime. The system comes with its own programming languages that allow developers to build and run it. Not only this, The technology has some of the most amazing wide-ranging applications that are powered by its native coin, Ether or ETH. Ether on the other side is responsible for running commands on the Ethereum blockchain.
Ether can be traded as a digital exchange or currency in the same fashion as other forms of coins such as BTC. As the world is advancing the bitcoin era, ETH leaves no stones unturned and is being traded highly in the global market. From payments to collateral and as a store of value, ETH is high-in-demand and upskilling its position among investors and potential traders.
Ether and bitcoin are both cryptocurrencies that can be traded through online exchanges and can be stored in different wallets. Having similarities in terms of functions and usage, the market capitalization factor makes a crucial distinction between the two.
In the year 2021, Ether was trading at approx $700 on 31 Dec 2020, which rose by more than 300% by the end of 2021, trading at around $4000 per token.
Ethereum transactions consist of executable codes that create smart contracts and have the ability to interact with self-executing applications and contracts built using them. While on the other hand, Bitcoin transactions are monetary, however, they can have messages and notes affixed by encoding them into the data fields in the transaction.
Another major difference between the two networks – Ethereum and blockchain is the time taken by the network to add new blocks of data, determining the transaction speed. Bitcoin networks add new blocks on an average of every ten minutes, whereas Ethereum adds new blocks faster and consumes around 15 seconds.
Both cryptocurrencies possess different public wallet addresses which are unique and enable users to receive funds. The address can be compared to an IBAN (International Bank Account Number) which works as a unique identifier of the financial firm. The address can help to identify the bank and the country of a client’s account. In the case of Ethereum, the address starts with “0x” while the bitcoin addresses can start from a 1, a 3, bc1, etc.
The cryptocurrencies might look similar in terms of trading as both share the same concept of distributed ledgers and encryption, however, differ widely in terms of technical aspects. Ether works as a powering fuel for Ethereum networks and its working applications whereas Bitcoin works as a digital asset like gold and silver for its network in order to store the traded value.
Both allow issuing new tokens and currencies respectively however through different platforms. An Omni layer platform is used by bitcoin’s network that is aimed towards developing and trading bitcoins only. While Ether is issued following different standards of the Ethereum network such as ERC-20. The Omni layer platform is centered around stablecoins only, while ERC-20 implements its own set of rules including functions such as – providing token’s total supply information, account balances on addresses, allowing funds to transact between addresses etc. These functions should be implemented before issuing the Ethereum token.
Ether and bitcoins, both are being traded highly by potential investors and are establishing their positions in the global market. However, a very common difference to understand between the two is, Bitcoin is a decentralized “cryptocurrency” that has a store value, whereas Ether is the native “crypto token” of the Ethereum network which is used to fuel its applications. Bitcoin tends to have a much higher market cap when compared to ether.