The cryptocurrency world is dense with transaction options. Out of all the different options, two have emerged as top contenders. One is the original cryptocurrency – tried and true and making improvements over time. The other, a newer brainchild with interesting features that set it up for more applicability. The former cryptocurrency is Bitcoin, while the latter is Ethereum. What are the main differences between the two? This article has all the information you need to know regarding what separates Bitcoin from Ethereum, so you can make an informed decision on which to invest in. A concise understanding of the differences between the various digital currencies allows for more clarity specifically on how Ethereum gambling sites work.
First And Foremost – Bitcoin
Bitcoin is the first of the cryptocurrencies. Released as an open-source software in 2009, the digital payment system has evolved into the most popular digital currency on the market. The currency form was created by a Satoshi Namokoto, an anonymous figure who has achieved legendary status in the tech universe. Bitcoin runs on a decentralized network, independent of all banks and financial institutions, and regulated by peers within the blockchain. As the first of its kind, Bitcoin has served as a model for other cryptocurrencies to adopt and adapt.
Ethereum Born Of Innovation
Ethereum is also an open-source software that was released in 2015. It is the brainchild of Vitalik Buterin and was modeled after Bitcoin’s blockchain technology. The currency is commonly referred to as Ether, but it is Ethereum’s blockchain that truly sets it apart. Ethereum supports smart contracts, or basically applications that execute commands upon meeting certain criteria. Ether can be bought, stored, mined and traded like Bitcoin, but most Ethereum-users are in it for the blockchain. We are starting to see Ethereum enter multiple markets, including the online gambling market where Ethereum online casinos, poker sites, and sportsbooks are emerging.
The Great Divide
The biggest difference between Bitcoin and Ethereum is intentionality. Bitcoin does exactly what it intended to do—offer an independent monetary platform that fosters decentralized online transactions. The Bitcoin blockchain works as a public ledger for transactions, which are verified by miners according to its block sizes. Ethereum, on the other hand, was made for more than just digital transactions. The Ethereum blockchain is considered a tool for developers, a foundation for them to build upon to create something new using the base platform established by the Bitcoin model. Bitcoin users tend to believe in the idea of a free marketplace. They also tend to be against the idea of banks and financial institutions. Ethereum users are more based in the future; they want to see what technical applications can be made with the network and its smart contracts.
Ethereum’s smart contracts work via blockchain applications running on different contracts. For example, imagine trying to buy a house. Normally, there is third-party involvement through realtors, escrow agents and more. With an Ethereum contract, a line of code would automatically authorize ownership of the house to the buyer from the seller once a deal has been made—no third-party involvement needed. The blockchain’s decentralized status makes these applications practically impervious to any fraud or censorship. An example of an Ethereum-based application in action is through Provably Fair Technology. This technology is used with online casinos (specifically casinos running on cryptocurrencies) and allows players to test the fairness of each game through cryptographic hashes. Since these hash values are unique, it is impossible for an online casino to tamper with a game result without the player finding out. Provably Fair is rapidly expanding and will likely be the future of online gambling, and it was born out of the Ethereum blockchain.
Back To Basics
On a less ideological level, there are more fundamental differences between the two cryptocurrencies. Ethereum’s transaction speed is much faster than Bitcoin. Bitcoin’s average block time is roughly 10 minutes, whereas Ethereum’s average block time is about 10-12 seconds. This is due to Ethereum’s GHOST Protocol, a tool that helps mitigate the block limits. Another basic difference is the Script each network is written in. Bitcoin’s basic scripting language is C++, and Ethereum is written in the Turing-complete language (made up of 7 different coding languages including C++, Python, Java, Javascript, Haskell, Rust and Go). Bitcoin’s blockchain block sizes are limited to 1 Megabyte blocks which are capable of being mined every 10 minutes on average. Miners are able to process 3 transactions at a time. Meanwhile, Ethereum’s blockchain has multiple-sized blocks and miners can process around 25 transactions per second.
All in all, Bitcoin seems to be a finite cryptocurrency—and not just in terms of actual Bitcoins available, but scalability as well. Bitcoin did recently fork off to make Bitcoin Cash, an improved version of its former self with bigger block sizes, but it still doesn’t match the technical applicability of Ethereum’s smart contracts. Ethereum has the potential to be fleshed out into more things, whereas Bitcoin is strictly for digital transactions. Both cryptocurrencies are available for use online (Bitcoin has more vendors), including marketplaces, online gambling sites and more. As far as which is better, it is more a matter of opinion. Bitcoin’s value is higher, so if you are in the cryptocurrency game strictly for the financial aspect, Bitcoin should be your go-to. If you are more innovation-based and can wait for Ethereum to grow, invest in Ether.
If you are new to the concept of digital currency, read our article explaining cryptocurrency.