ETHEREUM

We previously learnt about Cryptocurrency and subsequently the functioning of one of the earliest currencies, Bitcoin. It was built on the basic structures of Crypto-currency.

With the evolution over time, a new concept came forth in the world of Blockchain. Thus came into existence, Ethereum.

Ethereum is an open-source software that uses blockchain technology. Rather than hosting software on a server owned and operated by Google or Amazon, where the one company controls the data, people can host applications on the Ethereum blockchain. Scripts of code that can facilitate the exchange of money, shares, content or anything of value are called Smart Contracts.

These are formed using Ethereum Virtual Machine. Once this contract begins to run on a Blockchain, it acts like a self-learning operating system. These are self-executing contracts. The following is the path of work. Two parties reach a smart contract (agreement on the blockchain) with some condition of deliverables. Once the job is accomplished the blockchain automatically transfers the decreed coins(Ether) to the task accomplisher.

Ethereum has a technology similar to that of bitcoin. The only difference being Bitcoin only uses one specific application of blockchain technology. So to say blockchain is a wide space to grow technologically but bitcoin just uses one part of the spectrum. Ethereum contrary to that also focuses on running the programming code of a range of decentralized applications.

What we have here is a decentralized system that offers platforms for different software to work. Whilst also offering the forming and working ground for Ether, the Cryptocurrency for Ethereum.

The existence of substantial differences between Ether and Bitcoin led to the large-scale popularity of the newfound Currency.

When it comes to the differences between Bitcoin and Ethereum, Ethereum wins. Here are some of the reasons-

• The creation of new blocks takes a longer time in Bitcoin that being 10 minutes. While for Ether it takes 12 seconds.
• They cost their transactions in different ways. With ethereum, it is referred to as ‘gas’. Costs of transactions depend on bandwidth usage, storage requirements and complexity. With bitcoin, transactions compete equally with each other and are limited by block size
• Ethereum’s decentralized environment helps in laying off of intermediate workers thus helping in creating contracts without third parties. This environment helps in creating decentralized apps. Such apps go by the name Dapps and are open-source software that use blockchain technology.
• Rather than hosting software on a server owned and operated by Google or Amazon, where the one company controls the data, people can host applications on the Ethereum blockchain. This gives users control over their data and they have open use of the app as there’s no central authority managing everything.

To sum up, the blockchain is a vast platform, Bitcoin only reached a small part of the broad horizon. It reflected on shedding the centralized strings that often cost a person his/her privacy. With the development of Ethereum, we are beginning to understand the broadness of Blockchain and how it can be helpful to carry on several operations without setting a tracker on us.