Difference between Ethereum and Bitcoin
Ethereum and Bitcoin are two of the most significant cryptocurrencies, each serving unique purposes. Bitcoin, created in 2009 by an anonymous person (or group) under the pseudonym Satoshi Nakamoto, is primarily a digital currency. Its primary use case is as a decentralized store of value and medium of exchange, allowing peer-to-peer transactions without intermediaries. Bitcoin transactions are recorded on a blockchain that prioritizes security and transparency.
In contrast, Ethereum, launched in 2015 by Vitalik Buterin and others, is more than just a cryptocurrency; it's a decentralized platform that enables developers to build and deploy smart contracts and decentralized applications (dApps). While Ether (ETH) is the native currency used to facilitate transactions and computational services on the Ethereum network, the platform's focus is on programmability and flexibility.
Another critical difference lies in their underlying technology. Bitcoin uses a proof-of-work mechanism, emphasizing security. Ethereum initially used this mechanism but is transitioning to a proof-of-stake consensus model to enhance scalability and reduce environmental impact. This shift is part of Ethereum’s broader roadmap to evolve into Ethereum 2.0, improving transaction speed and energy efficiency.
In summary, while Bitcoin is primarily a digital gold advocating for financial sovereignty, Ethereum is a programmable blockchain that powers a vast ecosystem of decentralized applications, making it a platform for innovation beyond just currency.