With the ever-evolving technology and internet, privacy and data security have been a prime concern for the users. Governing authorities and governments imposing censorships on the internet and big institutions are accused of selling user data and compromised security is a big issue.
To eliminate the central authority or a central server system peer-to-peer networking system was invented. In peer-to-peer computing, each participating party acts as a node and sends/receives data. There is no central administration to block or hold transactions.
Bitcoin and Ethereum are two decentralized and peer-to-peer networking concepts based on cryptocurrency.
Blockchain is the distributed database system that acts as a public ledger and both Bitcoin and Ethereum are built upon it.
Ethereum is a computing network that runs smart contracts. Smart contracts are self-executing contracts that are agreed by buyer and seller and directly written into the lines of code.
The code is stored in a decentralized distributed database system called a blockchain. Ethereum’s vision is a censorship resistance and self-sustaining network of computers.
Ethereum software run on a network of computers and all data and smart contracts are replicated and processed without involving a central administration.
[ Related Article: Insight into Blockchain Technology ]
Bitcoin is a decentralized, peer-to-peer electronic cryptocurrency. There is no governing body or issuing authority for Bitcoin. Bitcoin network operates on cryptographic protocol and the public database is fault-tolerant and resistant to corruption.
Bitcoin network operates without a central repository or a centralized administration and the transactions directly take place between users. Bitcoin is currencies where Ethereum is a contract-based cryptocurrency.
Blockchain is a distributed database. In Bitcoin network Blockchain is a public ledger that records transactions. It is fault-tolerant and resistant to modifications that can corrupt the records.
All nodes share a copy of Blockchain, when a node joins the network it downloads all the blocks and verifies it. So modifying the Blockchain is nearly impossible, as everyone in the network has its copy and if someone modifies it, all other nodes will reject the modified block.
The blockchain contains all the transaction history that ever been happened in the network.
Each block has a hash value referring to the previous block.
A censorship resistance and self-sustaining network of computers
|Ethereum’s built-in native cryptocurrency for paying smart contracts.|
|Ethereum virtual machine||Decentralize computation platform for running smart contracts in computing nodes.|
|Swarm||File storage system for Ethereum|
|Whisper||Communication protocol for Ethereum|
|Solidity, serpent, and LLL||Smart contract programming languages|
|Geth, eth, pyethapp||Major Ethereum software. Geth in c++, pyethapp in python|
|Frontier, homestead, metropolis, serenity||A major software release for Ethereum|
A Decentralized peer to peer electronic payment system
|BTC||Bitcoin network’s main cryptocurrency|
|Bitcoin network||The node of computers that make the payment network|
|SHA256||Hash generation algorithm|
Algorithm for bitcoin transactions
|Wallet||Storing the bitcoins|
|Miners||Volunteers who maintain and secure the network|
|Blocks||Transaction data storage|
Bitcoin is a currency
|Ethereum is a computing platform|
Bitcoin is limited and there will be a total of 21 millionbitcoin in production
|Ethereum supply is unlimited|
Bitcoin is simple
|Ethereum has a rich programming language|
|The bitcoin software is not Turing complete||Ethereum is Turing complete|
|The bitcoin community is larger||It has a smaller community.|
Both bitcoin and Ethereum use Blockchain as a distributed database. However, bitcoin uses Blockchain to store transaction data while Ethereum uses Blockchain to execute code on it.
Bitcoin Blockchain keeps records of payments while Ethereum Blockchain keeps records of a computer program.
[ Related Article: Working of Blockchain Technology ]
Bitcoin Blockchain has limited capacity but Ethereum Blockchain can do what we ask it to do by writing computer programs.
Bitcoin is used to pay for goods and services while Ethereum is used to pay for smart contracts and programs running on the Ethereum network.
IBM and Samsung developed a proof of work concept using smart contracts and an Ethereum network where a washing machine can
Bitcoin decentralized the payment system and made it cheaper. Ethereum can decentralized computing networks and make them cheaper and reliable, as there will be no single server failure. All nodes are independent and have a copy of the Blockchain database.
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Arogyalokesh is a Technical Content Writer and manages content creation on various IT platforms at Mindmajix. He is dedicated to creating useful and engaging content on Salesforce, Blockchain, Docker, SQL Server, Tangle, Jira, and few other technologies. Get in touch with him on LinkedIn and Twitter.