Bitcoin vs Ethereum. Guide to Understanding Ethereum.
I’m writing this predominantly for crypto-newbies. Newbies need to know the difference between Bitcoin and Ethereum. Sometimes we forget how confusing this space can be to new individuals.
What is Ethereum?
Ethereum is one of the largest cryptocurrencies to date. Created by Vitalik Buterin
, it has a lot of distinct features that differentiate it from Bitcoin. Bitcoin was created to be a peer-to-peer digital currency and Ethereum was created to serve as a decentralized computer featuring smart contracts. Both are similar in that they utilize blockchain technology to facilitate transactions within the network. Ethereum though, allows for much more utility through the use of smart contracts.
What is a smart contract?
A smart contract is a digital contract which conditions are carried out automatically through self-enforcing logic. A basic example of a smart contract could be one that automatically pays your best friend X
amount of money on his/her birthday. The functionality of if/then logic on a blockchain allows for decentralized applications (dapps) to be created and executed on the Ethereum network. This is why Ethereum is referred to as a decentralized computer. You can create your own dapp by learning the Ethereum program language Solidity
, or you could use one of the thousands of already created dapps
What is a decentralized application?
A decentralized application is a application (program) that that is not controlled by a single entity, but rather, by the peers within the network. This means no central authority has control over the program itself.
Imagine if YouTube was not owned and controlled by Google, but rather, by everyone who is participating within the network. This means YouTube wouldn’t be able to arbitrarily decide which videos and users are suitable for the platform. This power would instead fall into the hands of the people. Side Note:
There’s already decentralized version of YouTube called DTube
which is built on the STEEM blockchain.
Technical Differences Between Bitcoin & Ethereum
|Bitcoin vs Ethereum ||Bitcoin ||Ethereum |
|Total Supply: ||21 Million ||None |
|Block Size: ||1-2 MB ||Depends |
|Block Time: ||~10 Min ||~15s |
|Consensus Algorithm: ||Proof of Work ||Proof of Stake (Soon) |
The total supply of bitcoin is predetermined; there can never be more than 21 million bitcoins created. Ethereum on the other hand does not have a max supply.
You can read Vitalik’s thoughts on this here
Block Size vs Gas Limit
Ethereum doesn’t have a block size but rather a gas limit
. Gas is a measure of the amount of computational work needed to execute a command on the network. The amount of gas needed will depend on the program you are trying to run -- similar to how much gas needed for your vehicle will depend on how far you wish to travel.
Gas limit is how much you’re willing to pay for a transaction to be carried out. Gas price is the price at which you’re willing to pay per gas. Together those determine your transaction fee. TX Fee = Gas Limit * Gas Price
Websites like EthGasStation
take an average of previous transactions to show what the average gas price is. Use it for your own benefit
Ethereum’s block time is much faster than bitcoin’s. ~15s vs ~10min. This means transactions on the ethereum blockchain on average will be much faster than on bitcoin’s. This is also why it’s typically recommended to use ethereum instead of bitcoin when making cryptocurrency deposits into exchanges like Binance
Bitcoin uses a consensus algorithm known as proof of work (PoW). Ethereum currently uses PoW, but near the end of 2018 ethereum will move to a proof of stake (PoS) algorithm known as Casper. This will initially be rolled out as a PoW and PoS hybrid where every 100th block is validated by PoS.
Understanding ERC-20 Tokens
ERC-20 is a set standard for tokens that are created on the Ethereum network. It was created to allow for interoperability between ethereum based tokens. There are tens of thousands of different ERC-20 tokens due to the free nature of anyone being able to create their own.
You may have heard of some of the more popular ones including:
- VeChain (VEN)
These are all essentially tokenized smart contracts.
Understanding Initial Coin Offerings (ICOs)
One of the most common uses cases for an ERC-20 token is to be used as a means to raise capital. These events are called ICOs or Initial Coin Offerings. ICOs are analogous to IPOs (Initial Public Offerings) in that, when an entrepreneur needs to raise capital to fund the business -- he/she asks venture capitalists for money. The venture capitalists in return ask for a stake in the company which is expected to increase in value over time.
The difference is an ICO does this through crowdfunding by utilizing blockchain technology. Instead of purchasing stock in the company, you’re purchasing a cryptocurrency (which is often just a ERC-20 token). Then, if the project gains real world utility, the price of the token should increases in value.
As you could imagine, because of the nature of how easy it is for anyone to create their own ERC-20 token, bad actors within the space have abused this power to launch fraudulent businesses which is funded through the sale of their token.
The most notable example of this is probably BitConnect which promised 1% daily compounding interest with your investment. This of course was a scam
, and BitConnect no longer exists.
This is not to say there’s no such thing as a legitimate ICO (Ethereum was funded through an ICO after all), however, know that an overwhelming majority of ICOs are fraudulent with 80% being scams
. As a newcomer to the cryptocurrency space, understand that there is a lot of fraudulent cryptocurrencies out there. The importance of DYOR (do your own research) can never be understated.
This post is starting to get pretty lengthy so I’m going to cut it here. By now you should have a good understanding of what ethereum is, why it’s important, and how it works. I’ve listed the most important takeaways below:
- Ethereum was created by Vitalik Buterin
- Ethereum is a decentralized computer featuring smart contracts
- The Ethereum platform allows you to build decentralized applications (dapps)
- Ethereum will transition to a proof of stake (pos) consensus algorithm
Thanks for reading!
Sorry I was asked to repost this.......After testing this platform for over a month, I can say that [Correx.io]1
is the best new exchange out there. It's based in Toronto, Canada and licensed as an MSB in the US. I've never waited more than 15 mins for a response from customer staff and they are by far the most courteous reps I've ever dealt with. They offer 27 pairs, but they are the most important ones. They adding 40 more in the next 30 days. Free deposits/withdrawals and considerably low fees are nice too. They don't keep any coins/tokens onsite which makes me feel very secure about my funds and the trading platform itself is one of the easiest I've used. They even offer an exchange guide to teach newer traders how to navigate through their site. The order book is the largest one I've ever seen, including Binance's so I know the secret is out now. Rumour is, they might be rebranding as a "private members only" exchange for VIP's. The good news is that all existing members will keep their membership forever. My advice is to at least sign up so you lock in your membership.
Speaking of VIP's, they are paid 0.1% as market makers on every trade. This is a first. .........Overall IMO [Correx.io]1
is an industry leader and I highly recommend it. Nobody asked me to write this review nor was I compensated in any way.....
5 stars out of 5 *****.
''' Correx.io Go1dfish undelete link unreddit undelete link
1: c*rrex.io* 2: co**ex.io/
Unknown links are censored to prevent spreading illicit content.
If you don't have Bitcoin or any Cryptocurrency, you can follow this Tutorial to buy your first Bitcoin with CoinBase. Why choose Binance ? - Transactions fees are low (0.1%). If you own Binance Coin (BNB), the fees are divided per 2 and payed directly with BNB. - Binance is very easy to use, even if you are new to the Cryptocurrency or trading ... What is Bonus Bitcoin? Bonus Bitcoin is a completely FREE bitcoin faucet paying out up to 5,000 satoshi every 15 minutes. Also, at the end of each day (around midnight UTC) you will receive an automatic 5% bonus added to your current account balance - provided you made at least one faucet claim during the previous day. As of 6th July 2017 all payments from Bonus Bitcoin are made instantly and ... 🔥NEW Uulotto.com Bitcoin Faucet - Claim FREE Crypto every 60 min - Sports Betting - Lottery - 50% Referral Commission 🔥 Read More 🔥NEW Coinfaucet.net Crypto Faucet - Claim FREE Crypto every 60 min - Choose from 500+ Coins - 50% Referral Commission 🔥 Earn free Bitcoin ClaimBTC Bitcoin Fuacet that you can Claim up to 1000 satochi every 15 minutes share your referal link to earn 50% from your refferal All payments from ClaimBTC are made instantly and directly into your Faucethub account. How much... GET 100-1000000 SATOSHI EVERY HOUR . Free BitCoin faucet platform. Get up-to 0.0000100 - 0.100000 BitCoin instantly every day, without investments! GET 100% REFERRAL BONUS FROM FAUCET & GET 30% BONUS FROM (VIP,PREMIUM,PLATINUM STATUS PURCHASE). MAKE 0.01-1 BTC DAILY FROM REFERRALS! SignUp ; Login Trade over 40 cryptocurrencies and enjoy the lowest trading fees in America. New Bitcoins: 15 min Max profit: 5 000 Registration: Yes Bonuses: Yes One of the largest faucets in the bitcoin market where you have a chance of winning a maximum of 5000 satoshi every 15 minutes. If you return the next day you will even receive a 5% bonus. You can use your won money in the Dice game, where you can win more Bitcoin. In ... Free GPU Bitcoin Mining Software Solution. With Bitcoin, miners use specialist software to solve math problems and are issued a certain number of bitcoins in exchange. Free GPU Bitcoin & Ethereum cloud mining. Start mine daily free BTC and ETH to earn money without hardware. Earn free bitcoins and altcoins: . how to get unlimited bitcoin for free in 2020! 4 secrets to earning bitcoin in 2020 (free btc). how to earn bitcoin in 2020! BINANCE:BTCUSDT Bitcoin / TetherUS. Trend Analysis xbt BTC Bitcoin (Cryptocurrency) 465 views. 27. 3. trendanalysis xbt btc bitcoin. Good afternoon everyone, I'm taking a look at a smaller time frame today, the 15 minute chart. I like to use the 15 min charts sometimes to get a glimpse of a few things that get drowned out a bit in the bigger time frames. But I also get more emotional when I ...
binance margin trading tutorial 2019💪estrategia para criptomonedas con altas caidas de precio 💰 - duration: 12:43. Semillero de Ingresos 3,237 views 12:43 Site link: https://get-bitco.in/?r=tqvmx267uo TAGS TO IGNORE:bitcoin, bitcoin hack, bitcoin mining, free bitcoin, btc, hack bitcoin, earn free bitcoin, bitco... CryptoRobert's quick and easy tutorial on how easy it is to send Bitcoin or Ethereum to Binance using GDAX. You read that correctly. ANYONE can use GDAX to quickly fund not just your Binance ... Earn Free Bitcoin Every 15 Minutes Earn Free Bitcoin Daily 0.005 BTC A Day Without Investment 👉Website Link 👇👇 👉https://get-bitco.in/?r=ewpizx3ura ... Bitcoin Pond Mining App 2020 - NEW VERSION UPDATED. This is my Personal Review and Experience about this new App called Bitcoin Pond App. It is a new BTC min... FREE BITCOIN CLAIM EVERY 15 MINUTES! NO INVESTMENT WITHDRAW 0.24 BTC FREE Website Link Check First Comment 👇👇FOR BUSINESS ENQUIRIES & SPONSORSHIP 👇👇 mtar... Use a Crypto Faucet to get Free Binance Coin-BNB. Complete captcha every 15 minutes and claim your BNB. Here is a link for the BNB Faucet: https://topcoins.p... Swing Trading 15-min charts in Bitcoin and Altcoins. How to find day trades and short-term swing trades in cryptocurrencies. Hallo zusammen, in diesem Video zeige ich euch das neue Binance Lending Programm, bei dem ihr bis zu 15% Rendite im Jahr bekommt. Viel Spaß! #Binance #Lendin... Get free BNB or BAT every 15 min Https://topcoins.pw?ref=11441