Blockchain technology has intrigued lots of people since it was invented. The rise of cryptocurrency, which uses the technology in its operation has even intrigued more with its decentralization approach and the ability for anonymity in transactions.

Even though Bitcoin is widely recognized as the first cryptocurrency, there are plenty of alternatives which have been developed. Ethereum is one of the altcoins and a better substitute to Bitcoin.

Ethereum Founder And History

Its founder- Vitalik Buterin proposed the currency in 2013. Ethereum is an open source platform that utilizes the technology in order to produce smart contracts and ensure secure crypto trading. Its open source nature enables developers to create and publish decentralized apps for value transfer, data storage, and sophisticated financial tracking.

A year after the concept’s introduction, Vitalik announced the addition of Dr Gavin wood and Jeffery Wilcke into his team. He, in the process, published the ‘yellow paper’ where he detailed the Ethereum Virtual Machine which they promoted the same year for a first Ether sale. The initial allocation consisted of over 60,000,000 Ethers which were exchanged for over 30,000 bitcoins

Ethereum vs bitcoin

Ethereum vs Bitcoin; The Differences

Now, there is a bit of similarity in Bitcoin and Ethereum regarding proof systems and privacy. But while both Ethereum and Bitcoin are cryptocurrencies using the same technology, they shouldn’t be mistaken to be alike. Here are key differences between the two;

• Ethereum has more options in its means of exchange from its Ether cryptocurrency, EVM and smart contracts.

• Ethereum also has a modified security protocol which operates on a proof of stake system unlike Bitcoin’s proof of work structure

• Ethereum, unlike Bitcoin, allows for two transaction types. While Bitcoin lets users transact publicly, Ethereum transactions can also be made in private.

• Quicker block time. Ethereum has an average block time of 12 seconds whereas bitcoin has 10 minutes. This is a considerable difference between the two currencies. It means miners can complete more blocks and receive more cryptocurrencies faster than Bitcoin’s

• When it comes to mining, Ether coin’s supply is in excess of 90 million in contrast with Bitcoin’s 21 million. Experts have approximated that only half of the coins will be mined by the year 2021 compared with Bitcoin’s supply by which a significant percentage has been mined already.

• The reward system of the two is also different. Bitcoin on one hand rewards miners who solve blocks with BTC. on the other hand Ethereum omits block rewards and hands miners the freedom to charge transaction fees

Ethereum Transaction Components

Key components of an Ethereum transaction include a receiver’s address, a signature of the sender, the transaction amount, the value of gas price which is the figure determining how much the sender is paying for a computational step, the start gas value which is the control of the number of computational steps a transaction can execute and the data field which is optional.

The start gas value and gas price value are only found in transactions with Ethereum. They play a crucial role in averting attacks to the network, thus making Ethereum safe from malicious parties that could overload the network.