Ethereum vs Bitcoin Explained
If you’ve heard of Bitcoin, you’ve probably also heard of Ethereum, and might be confused about the difference.
While both Bitcoin (BTC) and Ethereum’s coin Ether (ETH) are cryptocurrencies, mined on their respective blockchains, the way they operate is quite different.
Let’s start with the basics.
About Bitcoin (BTC)
Bitcoin is the world’s first and most popular decentralized digital currency, launched in early 2009. Over the past decade it has proven to be the most successful attempt to create virtual money using cryptography — the science of protecting information through codes (that’s why it’s called a cryptocurrency).
Bitcoin transactions are recorded and stored on a public ledger known as the blockchain. Blockchain technology is being used for more and more purposes, but digital currency is the first and most well-known.
Bitcoin is created when Bitcoin miners with powerful computers run complex programs that confirm groups of transactions stored on the blockchain; it takes about 10 minutes to form each block of the chain, which is rewarded by paying the miner a set amount of Bitcoin. This reward is halved over time, known as “halvening.”
About Ethereum (ETH)
Ethereum/Ether/ETH (this will make more sense in a minute) was designed to be more flexible than Bitcoin, and to go well beyond its purpose. “Ethereum is a global, open-source platform for decentralized applications,” states Ethereum.org. “On Ethereum, you can write code that controls digital value, runs exactly as programmed, and is accessible anywhere in the world.”
Bitcoin is mined on the Bitcoin blockchain, and Ether is mined on the Ethereum blockchain. So, the blockchain is Ethereum, and the currency is Ether. With Bitcoin, both the blockchain and the currency are Bitcoin (although, well, technically, bitcoin the currency is usually spelled with a lowercase b, whereas Bitcoin the network usually has an uppercase B.)
If you mistakenly call Ether coin “Ethereum” or spell Bitcoin the currency with a capital, you’ll be forgiven — unless you’re talking to a hardcore crypto crowd. And even some of them get it wrong. But you’re reading this because you wanted to know the difference, so let’s dive a bit deeper.
The biggest difference between Bitcoin and Ethereum is that Ethereum is a programmable blockchain, used to run smart contracts. A lot of other digital currencies (like stablecoins) and hundreds of decentralized apps (DApps) are built on Ethereum. In fact, it’s by far the largest and most popular smart contract blockchain. Others include Tron and Loom.