Difference between Bitcoin and Ethereum blockchains (2024)

Blockchain is a decentralized peer-to-peer network. Its primary purpose was to serve as a successful alternative for centralized applications. Blockchain technology rose to popularity with the launch of the Bitcoin blockchain. Its popularity and functionality have continued to grow as people realize the technology’s true potential.

Bitcoin

Bitcoin is the first blockchain that successfully replaced conventional currency and centralized authorities by creating the world’s first-ever peer-to-peer decentralized digital currency. Bitcoin is the local currency of the Bitcoin blockchain. The Bitcoin blockchain is maintained by a network of nodes (miners) who process the Bitcoin transactions, package them into blocks, and add them to the global ledgerA ledger is a component of blockchain that is immutable and visible to everyone on the blockchain network. It is made up of sequentially linked blocks containing chronologically ordered transactions. Blocks are linked together using the previous block’s hash..

Ethereum

Ethereum is one of the most capable blockchains in terms of its features. Ethereum is an upgrade over the existing Bitcoin blockchain. Not only does Ethereum allow cryptocurrency transactions, but it also adds the functionality of adding executable code on its blockchain network in the shape of smart contracts. Adding smart contracts allows Ethereum to power many applications, also known as Dapps.

Bitcoin vs. Ethereum

Both Bitcoin and Ethereum are decentralized peer-to-peer networks. They are two of the most popular blockchains existing today. They follow the fundamental principles of blockchain technology. Even though they are based on the same technology, they have some significant differences in design and implementation.

The differences include the availability of smart contractsIt is a piece of executable code, in the form of bytecode, hosted on the virtual machines of the Ethereum blockchain., virtual machinesVirtual machines are emulation of a physical computer. They are based on the computer architecture and are used to provide functionalities of a computer while safegaurding the actual hardware in case of a attack., the consensus algorithmAn algorithm used to reach consensus on the validity of the transaction being executed in the blockchain network., the block sizeSize of the block containing the transaction and smart contracts, depending upon the blockchain network., the supply limit of their crypto-currencies, the block generation time, and the use case.