Comparing Ethereum vs Bitcoin: What are the Differences?

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Bitcoin and Ethereum are the two most well-known cryptocurrencies today, with the former the legacy cryptocurrency created by the anonymous Satoshi Nakamoto in 2008 and the latter proposed by Vitalik Buterin in 2013.

Although both cryptocurrencies have several similarities, their designs are distinctly different and the application of their networks are tailored towards different use cases.

Understanding the key differences between Bitcoin and Ethereum can provide a better grasp on the broader cryptocurrency and blockchain industry as a whole, as they are both integral components of the market with large open-source communities and influential developments.

Ethereum vs Bitcoin

Comparing the Differences Between Bitcoin and Ethereum

The main difference between Bitcoin and Ethereum stems from their conceptual design.

Bitcoin is predicated on becoming a secure, censorship-resistant value system outside of the traditional financial realm while Ethereum is designed as a ‘decentralized world computer’ where Turing-complete functionality enables users to build and run applications on the network through the Ethereum Virtual Machine (EVM).

There are numerous subtle differences between Bitcoin and Ethereum, but generally analyzing the primary variations requires evaluating the following:

  • Transaction Schemes
  • Monetary Policy
  • Smart Contract and Scripting Functionality
  • Mining/Consensus/Development
  • Narrative & Practical Applications

Transaction Schemes

Both Bitcoin and Ethereum employ public-key cryptography for authenticating transactions that are validly signed by the party who retains control of the private keys to access the native cryptocurrency on each network, BTC and ETH, respectively. However, they differ in the structure of their transaction models.

Bitcoin uses what’s called an ‘unspent transaction output’ scheme known as UTXO. Transactions are all linked together in a chain of…

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