Ethereum Blockchain vs Bitcoin Blockchain

The differences between Bitcoin and Ethereum, except in the price per token, lay in the fundamental nature of the technologies they represent.

by Ivan Penkov
04 April • 4 min
In Tech

Bitcoin went live on 3 January 2009 and Ethereum’s blockchain launched on 30 July 2015. Both technologies are public blockchains, which means that each node can participate without asking for permission. Because the Blockchains are public it makes it hard for a single entity to falsify the data that was recorded on the Blockchain. The goals of both Blockchains are different, however.

About Bitcoin Blockchain

Bitcoin was designed to do one simple task – to be a secure peer-to-peer censorship-resistant payment system. The security comes from the fact that everything is public and can be verified by the nodes in the network, which serve as validators. All transactions are legitimate as long as they are confirmed in a block. Transactions with six confirmations in Bitcoin can show up in around one hour. Transactions in Bitcoin are very secure and C++ is the coding language used. There is a purposely implemented limit of 70 specific commands that can be used in Bitcoin to make it hard for a hacker to exploit the Blockchain. Bitcoin uses Proof-of-Work (PoW) for its consensus mechanism where for each block there are 12.5 coins created.

Bitcoin physical coin with integrals


About Ethereum Blockchain

Ethereum, on the other hand, was designed to be just like Bitcoin and much more. The goal of Ethereum is to be a decentralized world computer that runs smart contracts. Smart contracts are applications that run as they are programmed without the possibility of editing, downtime or censorship. Ethereum allows for developers to deploy their ideas easily because of the way the protocol was built. It allows for much more flexibility than Bitcoin and a lot more functionalities to program any type of smart contract. Ethereum runs a Turing complete language. It includes seven different programming languages. It is very different from Bitcoin, which is written in C++. Ethereum was launched with an ICO raising around USD 18.5 million. Ethereum uses PoW consensus protocol that is similar to Bitcoin’s. The reward per block is constant and is equal to five Ethers (ETH-Ethereum’s token). There is no cap on the total supply contrary to Bitcoin, where the supply is maxed at 21 million. Ethereum block time is several seconds, whereas Bitcoin blocks are each 10 minutes.

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source: Ethereum Brand Images


Blockchain Global Mission

The goal of Bitcoin is to become a globally accepted payment solution and currency by making it easier for users to spend and businesses to accept Bitcoins. A global recognition of Bitcoin as a currency by governments would be a big catalyst to encourage more people to utilize it. The value of the coin would subsequently increase as a result of recognition.

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The future Ethereum depends on the technology. It was accepted as the blockchain standard for the Microsoft Azure. Microsoft chose Ethereum over Bitcoin because of the flexibility it provides for developers. Ethereum would be very useful in the Internet of Things (IoT). For example, unlocking of devices using the Ether token. Ethereum can be used in the financial services industry as well. In fact, Ethereum smart contracts can serve as a substitute for the SWIFT messaging. Blockchains, in general, could settle accounts faster than banks and save a lot of costs. The biggest risk for Ethereum is that the code of its smart contracts cannot be changed once released. If there is a bug in the smart contract, it is ruined. The future of Ethereum is more uncertain than Bitcoin’s because of the security vulnerabilities in its smart contracts.

Both blockchains have different purposes and are not rivals. They fill in different niches and can coexist together. Bitcoin is a censorship-resistant store of value and payment network and Ethereum is focusing on smart contracts and decentralized applications. There is value in both technologies.