Bitcoin and Ethereum; what is the difference?

If you have not heard about Ethereum, then you must have heard about Bitcoin. These are the two biggest names in the fast growing and dynamic world of crypto-currencies. The two however, differ in purpose and build. To start off, the general public does not know who Satoshi Nakamoto, pseudonym for the creator/s of Bitcoin is/are, but we know Vitalik Buterin and his team, creators of Ethereum.

On a technically fundamental level, bitcoin is a currency built on the blockchain technology, created to disrupt the existing (and failing) financial system, while Ethereum’s goal is to create a utility application built on the blockchain too. Bitcoin acts as a medium of exchange or store of value, while, Ethereum is programmable money, meaning it is more than just a currency. It is a software platform that allows the creation of smart contracts and decentralized applications on its ledger technology.

The ability to create smart contracts on top of Ethereum gives it more functionality and potential for wider application than its current ‘Initial Coin Offering (ICO) launch pad’ status. This has already attracted implementation of the technology in some traditional big name companies. The breakthrough point for mainstream adoption however will only follow a breakout project with real and functional application built on the platform, other than crypto-kitties.

Bitcoin and Ethereum differ in many other little ways: 10 min block time for bitcoin vs 15 sec for Ethereum (with no congestion), the two use different programming languages, Bitcoin has a limited 21 million coins over its life, while Ethereum’s tokens were initially set through a crowd fund. The developers of Ethereum are also environmentally sensitive, thus have a plan to move to Proof of Stake, unlike the current approach and Bitcoin’s Proof of Work, which consumes lots of power.

Both crypto-currencies have increased massively in value over the past one year, Bitcoin crossing the $20,000 mark, while Ethereum hit a high of $784* and is predicted to reach the market cap of Bitcoin in a few months. This is likely to happen if a few applications that solve real world problems make it to the mainstream market. Ether, the crypto-currency used in Ethereum, held up by ICOs will be released and the platform likely to gain more acceptance. Similarly, Bitcoin, the father of all crypto-currencies will continue its rise, supported by Wall Street’s new interest and individual investors. These are the very early and interesting days for crypto-currencies.