There has been a lot of hype around Ethereum recently. Many investors are jumping at the opportunity for the sharp increase in price for Ethereum due to its rising demand. Many have claimed that Ethereum is the superior alternative while comparing Bitcoin vs Ethereum. Today, we shall spoon feed you a fully comprehensive guide to the ongoing war between Bitcoin vs Ethereum.
What are Bitcoin and Ethereum?
Before we too compare Bitcoin vs Ethereum, let us get back to the basics.
Many of us have heard the word “Bitcoin” somewhere before. But what kind of coin is this Bitcoin? Simply put, Bitcoin is a type of cryptocurrency. This term brings us to another question. What in the world is a cryptocurrency? A cryptocurrency is a virtual currency that uses cryptography (using secure communication channels) for security purposes and is free from any government intervention. In short, This means that the government is incapable of manipulating the value by merely printing more or less money. Things that would typically land you jail time in the stock market may now be viable when in dealing with cryptocurrencies. Ethereum, like Bitcoin, is another type of cryptocurrency. Besides Bitcoin and Ethereum, there are many other types of cryptocurrency such as Litecoin, Ripple and Dogecoin.
How can I get Bitcoin or Ethereum?
Let’s start off with the hard way. A process called mining can generate Bitcoin or Ethereum. We shall use Bitcoin as an example. To start off, you will need to purchase a hardware built specifically for mining Bitcoin. This hardware is just like a regular PC, but one with better specifications and higher performance. The device will connect to a network where you will “mine” for your cryptocurrency with other users equipped with the hardware.
After completing step 1, the process of mining continues like this. First, the device will verify that the recent transactions from the network are valid. These transactions are put inside a “block” which contains a cryptographic hash via an SHA-256 hashing algorithm. This block is then connected to the previous “block” which forms a “blockchain“. Miners must provide a “proof-of-work”, which in this case, the miners need to find the “nonce“. The hashed value of the nonce and the block must be smaller than that of the network’s difficulty target. When this value is found, a bitcoin is found and will be added to the system. The miner who finds the “nonce” will be generously rewarded. Sounds complicated with all the technical terms? In layman terms, spend cash on an expensive piece of hardware, let it solve super duper complex math problems and pray that you are the blessed one.
The straightforward way to obtain Bitcoin or Ethereum is to purchase it directly! There are many online markets out there trading them, and you will be able to locate them via a simple Google search. We will not be posting any links here as Guidesify has yet to analyse and validate the trustworthiness and credibility of the providers listed in search results. Be sure to do sufficient research on your on before carrying out any dealings with them!
What’s the value: Bitcoin vs Ethereum now?
1 Bitcoin is valued @ SGD 22456.68, and 1 Ethereum is valued @ SGD 639.8128 (prices as of 12 Dec 2017). Considering how Bitcoin is more widely used as opposed to Ethereum, it is no wonder that Bitcoin is valued more per unit compared to Ethereum. It is critical to know that the value of cryptocurrency are super volatile and hence the value might differ a lot while you are reading this.
How to use Bitcoin and Ethereum?
Again, Bitcoin will be used here is it is the more commonly used cryptocurrency. You may not have noticed, but many major retailers accept Bitcoins. Hotel booking sites like Expedia accept Bitcoin as a verified payment method. Computer hardware retailers such as Newegg, too, also accept Bitcoin as a transaction method. If that doesn’t impress you, Microsoft, a global tech giant, also allows you to pay via Bitcoin. Many online gambling sites also use it. There are also people who buy Bitcoin and Ethereum purely as an investment.
Since the use of cryptocurrency is anonymous, people in the dark web have been exploiting it too. Dark web is the dark side of the Internet which is not accessible by mainstream internet browsers (i.e., Chrome, Edge, Firefox, etc.). There are people using bitcoins to buy drugs, firearms and pornographic materials on the dark web. It is another complicated matter which is to be covered another day.
With Ethereum growing popularity, we can assume that it will be accepted more widely over here soon in the not so dark web.
Why is Ethereum gaining so much hype (Bitcoin Vs Ethereum videos)?
We have been using Bitcoins for many of the examples above so now let us shift our focus to Ethereum. Why is Ethereum suddenly getting all the hype now? How is Ethereum better than Bitcoin?
One big reason is the “smart contract” feature of Ethereum which offers and outranks Bitcoin in real-world applications. Ethereum can execute a set of actions with its smart contract program once the terms laid out in the contract have been met. In other words, it is plausible to program a contract and automate processes by integrating it with blockchain technology. By utilising smart contracts, the need for a third party to authorise and validate the paper contract is redundant since the program is doing all the work.
The integration of Ethereum’s blockchain technology with smart contracts is backed by and comprises of various major companies. 30 companies had come together and formed the Enterprise Ethereum Alliance. These companies aim to design the official Ethereum program so it can be used to monitor data and financial contracts. JP Morgan, Microsoft, Samsung and Intel are some of the biggest names that are supporting that rolling. Now that surely will spark interest in potential investors.
With this announcement, there is thus a lot of coverage around Ethereum. Now you know why there are so many “informative” videos and posts appearing on your newsfeed comparing Bitcoin vs Ethereum.
While Ethereum is gaining popularity, Bitcoin will still be around for a long time. We believe Bitcoin will always be used primarily and a preferred choice for average cryptocurrency users in future. Ethereum, on the other hand, will be utilised more by corporates for its smart contract integration feature. Of course, this is just pure speculation and who knows what will happen in the future? If you are tempted to invest in cryptocurrency after reading this, do think twice about what you should do before making any investments.
Last updated on March 31st, 2020.