Bitcoin
and
Ethereum
are cryptocurrencies that are both based on blockchain technology. The technology they use has common aspects as well as different sides.
The most important difference between Bitcoin and Ethereum
Blockchain Technology
is smart contracts. We can think of smart contracts as programs that run on the Ethereum blockchain using the Ethereum infrastructure and can be produced by anyone. Unfortunately, it is not possible to talk about such a technology for Bitcoin. We can say that this feature makes Ethereum a kind of raw material for new ICOs to be produced. Ethereum founder Vitalik Buterin describes this feature of Ethereum as follows: “If we think that Bitcoin is gold and Litecoin is silver, Ethereum is oil.” So while Bitcoin is a
cryptocurrency
, Ethereum is a technological infrastructure. The name of Ethereum’s cryptocurrency is Ether.
Bitcoin and Ethereum use the consensus system for security purposes in their transfers. Both use the proof-of-labor (PoW) method as the consensus system. In this system, transactions to be added to the blockchain by miners need to be confirmed. Miners who do this produce blocks by solving mathematical transactions and earn cryptocurrency rewards from each block in return. While an average block for Bitcoin is solved in 10 minutes, we can say that this time is 12-14 seconds for Ethereum. This allows Ethereum transactions to be processed much faster.
It is also known that the Ethereum company is planning to make a change in the consensus system. Accordingly, Ethereum will switch from the proof-of-work (PoW) method to the proof-of-stake (PoS) method. In this method, instead of solving mathematical formulas for mining, it is necessary to buy the crypto money and keep it in the wallet for a certain period of time. Thus, the mining activity will be able to be carried out by more people. When this change takes place, there will be a new difference between Ethereum and the technology used by Bitcoin.
