Skip to main content

So, is Ether = Bitcoin and Ethereum = Bitcoin blockchain?

Is Ethereum also a cryptocurrency?
Well, formally speaking, Ethereum is a blockchain based distributed platform, and Ether is the currency used on that blockchain.

Is Ether same as Bitcoin?
Just like Bitcoin, Ethereum blockchain also needs mining (i.e., proof-of-work and thus, computational resources to mine the blocks). Miners are rewarded with Ether. But Ethereum also has the concept of smart contracts and an associated virtual machine to execute the smart contracts. Besides rewarding miners with Ether, computational resources consumed by the code executed on Ethereum Virtual Machine is controlled by spending Ether, which is termed as gas.

I understand the Ethereum blockchain supports smart contracts, but is Ether similar to Bitcoin?
The answer to "why we need a cryptocurrency?" is different for the two blockchains. For Bitcoin, the cryptocurrency is the reason why blockchain exists; i.e., the sole purpose of the blockchain is to store bitcoins. For Ethereum, it's the other way around--the purpose of the cryptocurrency is to use Ether as fuel for the blockchain.

Ether is the incentive for network nodes to maintain a healthy and secure blockchain, as well as a means to ensure that developers write quality smart contracts, which do not waste system resources.

The difference exists because Bitcoin's blockchain application is restricted to money, while Ethereum's blockchain is programmable. Every full node participating in the Ethereum network contains the Ethereum Virtual Machine (EVM) that is capable of running smart contracts, and every computational step performed to run the contract has a cost paid in Ether.

A protocol-level difference also exists: Ethereum has the concept of an account (which has a coin balance), while Bitcoin doesn't directly store accounts. It just differentiates between "spent" and "unspent" coins. The Unspent Transaction Output (UTXO) is used by Bitcoin to track who has how much bitcoin.

Of course, when we go to lower level details, there are many more differences.

Can I see a sample Ether block?

Is there a list of all Ethereum nodes?

I want to know more about Ethereum.
An excellent resource is the White paper on Ehtereum Wiki. 
Labels:

Comments

Post a Comment

Popular posts from this blog

Blockchain 101 for Developers - Part 2 - Smart Contracts (concepts)

I have heard of Bitcoin but what is Ethereum? While bitcoin (traditionally) allows simple addition and subtraction operations, which are sufficient for exchange of cryptocurrency, Ethereum enables more sophisticated operations. Ethereum positions itself as a programmable blockchain . Ethereum takes the blockchain concept popularised by bitcoin and introduces a full Turing-complete virtual machine on top of it. The machine is capable of executing code, which is usually written in Solidity programming language. But what does it do? Most commonly, the programmable code is termed as a smart contract ; it establishes conditions under which things of value are exchanged. In other words, instead of using a traditional legal framework to bind two parties, there is code deployed within the blockchain which automatically enforces an agreed contract. The contract could be as basic as "money is transferred from an escrow account to Alice's account, only when today is a Sunday...
Post a Comment
Read more

Blockchain 101 for Developers - Part 1 - Concepts

What problem does Blockchain address? (In very simple terms) Blockchain primarily addresses aspects of record keeping across multiple, distributed peers such that trust between them is no longer an issue and no central authority is needed either. Somewhat more formally, blockchain is an immutable, distributed ledger of transactions . In today’s world, each organization/ peer participating in a business network performs its own bookkeeping of facts of interest. For example, a car manufacturer would have its own data related to the cars manufactured and a car distributor/ reseller will have its own data---even through there are overlaps and they might be talking about the same asset (i.e., a specific car). Same goes for financial institutions---each bank will have its own data. Such silos definitely need either central authorities/ middle-man who everyone can trust as well as settlements and reconciliation processes to iron out conflicts. Blockchain addresses all these problems b...
Post a Comment
Read more