Before going all in with the main subject of this article, which is an overview of both Bitcoin and Ethereum’s Blockchains, I will start with a breve explanation of what a blockchain is. A blockchain is a distributed database (a set of databases distributed in different geographical and logical areas) which basically is a chain of blocks designed to be tamper proof, each block is linked to a previous one and contains the information needed for the situation in which the blockchain is being used. In cryptocurrency, each block contains the transactions that users have made through time. That is why when you make a transaction you need to wait until at least one block is produced before your transaction fulfills, because it needs to be added to a block in order to be valid.
Bitcoin
Considered the father of all cryptos, Bitcoin was created back in 2008 introducing the groundbreaking blockchain technology and giving a practical and therefore applicable solution to the Game Theory’s Byzantine Generals Problem. It was introduced by the individual or collective known as Satoshi Nakamoto as an alternative medium of exchange to those of fiat currency owned by huge banks and institutions. Their main purpose was to achieve a strongly secured system as well as one that protects the privacy of their users. Everyone knows that anyone can know what is your personal bitcoin wallet address unless you give the information, furthermore, is absolutely not practical to try to crack someone private key with brute force attacks, not even to the fastest computer on the Earth. Bitcoin’s blockchain make use of a Proof-of-Work mechanism to establish consensus across its distributed network. This consensus mechanism requires a huge consumption of energy and expensive hardware to work, and only allows a restricted number of transactions per second, but is considered the most safe blockchain consensus mechanism in existence. This been said, Bitcoin acts more like a medium of exchange than like a blockchain protocol.
Bitcoin’s supply is fixed at 21 million units; this means that when all the 21 million Bitcoin units are in circulation, another Bitcoin can never be minted again. It takes around 10 minutes for a block to be minted introducing it in the blockchain with approximately 2000 transactions, using this numbers Bitcoin have the capability of executing 4 or 5 transactions per second.
Pros:
- Completely decentralized and tamper proof
- Uses the safest consensus mechanism on Earth
Is being accepted for a huge amount of institutions across the globe - If you bought a few some years ago now you are millionaire :0
Cons:
- Very low transactions per second rate
- It’s getting harder and unpractical for a regular person to become a miner
- You can’t really use it for anything else than a medium of exchange :(
Ethereum
Ethereum, known as the possible “Bitcoin Killer”, was launched in 2015 and founded by Vitalik Buterin to expand the applications of the blockchain beyond what Bitcoin have achieved. Its blockchain enable the development of smart contracts and decentralized applications (dapps), furthermore, is the first blockchain protocol that allows this possibility. The Ethereum we refer now days is not the same blockchain than a few years ago; this is because of the hard fork that happened back in 2016, the old blockchain was renamed to Ethereum Classic and the new one Ethereum. With the help of Ethereum’s native programming language, Solidity, developers can easily create applications and smart contracts and deploy them on the blockchain. Ethereum uses the Proof-of-Work consensus mechanism introduced by Bitcoin, but is planning to change to a mechanism called “sharding”, which is more efficient. This mechanism is currently being used by others blockchain projects but the greater adoption of Ethereum can make it work quite well in its blockchain. Currently Ethereum supports more than 20 transactions per second, surpassing Bitcoin in this aspect.
Pros:
- Decentralized and tamper proof
- Uses the Proof-of-Work consensus mechanism, so safety is not a problem
- Has the possibility of creating dapps and developing smart contracts
- Future change of its consensus mechanism should lead to a significantly higher transactions rate
- Its wide adoption and being the standard choice when developing smart contracts and dapps
Cons:
- Still a low transaction per second rate
- Has been susceptible to hard forks (this could also be a good thing because you end up with two coins instead of one ;) )
- Scalability issue, which is expected to be solved, at least in part, with the introduction of Sharding.
This is everything for now, tell me your thoughts on the comments section and if you want me to review a specific blockchain.