Meet the Ether cryptocurrency, what differences and similarities does it have with Bitcoin?
Among the wide mosaic of cryptocurrencies existing today, Ether (ETH) and Bitcoin (BTC) are the undisputed leaders of the crypto world for several reasons that have made them the leading players in this new market and the favorites of investors. Let’s learn a little more about these cryptocurrencies.
Let’s talk about Bitcoin (BTC)
Created in 2008 by an individual or group of individuals under the alias of Satoshi Nakamoto, it emerged as a disruptive proposal for the international financial system, whose main objective is the decentralization of person-to-person (P2P) financial transactions.
The above, based on blockchain technology that increases the security of transactions since this chain is inviolable and immutable. Blockchain is basically an open source ledger, to eliminate the need for a financial intermediary, be it a bank or government, to validate person-to-person transactions, reducing costs and time.
His proposal also includes the establishment of a new financial system, in which people are the ones who participate and validate it, waiting for the massive adoption of Bitcoin as a means of payment, validated through the blockchain network by thousands of miners to give certainty to the system.
Let’s talk about Ether (ETH)
The Ethereum Network emerged in 2015, created by the Russian-Canadian engineer Vitalik Buterin, who unlike the creator of Bitcoin does not hide his identity.
Buterin’s proposal through his network includes that, in addition to continuing to use blockchain technology to provide security and validate transactions, the Ethereum network would serve as a basis for programmers to develop within it a whole range of decentralized financial services.
Today, this network is one of the most widely used for the generation of smart contracts, which help both to facilitate small person-to-person transactions, as well as to automate more complex actions such as the sale of financial options and futures.
Similarities between ETH and BTC
- Both projects, one after the other, represent a challenge to the understanding of economics and finance as we conceive them today.
- Both BTC and ETH have exploited this technological tool to provide security to transactions due to its inviolability and immutability features.
- Validation (miners). In both cases, the validation of transactions depends on the participation of the members of their respective networks, who are known as miners, and who receive a certain amount of ETH or BTC, as the case may be, as a reward for each block validated and attached to the chain.
- In both projects, the intention of having a large and active network of participants to validate transactions is to eliminate the need for an intermediary to validate these operations. This is called decentralization.
- Despite the fact that, according to their fundamentals, ETH and BTC tokens were not created for speculation, they have gradually earned a place as unregulated financial assets with attractive returns for investors, but with a constant back-and-forth between their highs and lows in price.
Differences between ETH and BTC
- Vision and mission. While Bitcoin seeks to be, basically, a new means of payment with worldwide acceptance and endorsed by users, Ethereum has decided to go a step further, creating a network with the purpose of sustaining a whole range of applications focused on decentralizing finance in the world.
- Satoshi Nakamoto stipulated that in order for Bitcoin to overcome the inflationary phenomenon, unlike fiat money, it would have a maximum issuance of 21 million tokens. This situation is not replicated in the case of Ethereum where so far no limit has been set for the issuance of ETH tokens.
- Market capitalization. In the case of Bitcoin, since its launch where its value was estimated at just a few cents on the dollar, at the time of writing this article, the quotation of each bitcoin exceeds $30,000 dollars.
As for Ether, since 2015 when it reached prices of 60 cents per unit, at present, its valuation exceeds $1,900 dollars per token.
These two are the most recognized cryptocurrencies today, it is important to know them a little more because this story is just beginning and, in combination with the development of several other technologies, such as artificial intelligence or the 5G network, they will give a lot to talk about during the next decade.
Cryptocurrencies: benefits and risks of virtual currencies
2017 has been the year of cryptocurrencies: More than 300 new virtual currencies have been created. Bringing their total to over 900. In other words, the number of virtual currencies in the world more than triples the number of conventional, state-issued currencies, which according to the UN currently stand at 180.
Ethereum and smart contracts. What do they bring?
Vitalik Buterin designed the Ethereum platform based on blockchain technology, which means that it is also an open source and decentralized ledger just like Bitcoin, but with the intention of going beyond what the original cryptocurrency has established.