Quick Facts and What Makes Ethereum Different From Bitcoin
If you have followed Cryptocurrency news for the last 11 months, then you have probably heard about Ethereum. That’s because just like Bitcoin, the world’s most famous cryptocurrency, Ethereum has experienced tremendous growth having shot up by over 4000% since January. Amazing returns, right? But what exactly is Ethereum? Ethereum is a decentralized platform that allows people to create and run smart contracts using blockchain technology. Ethereum is open source, which means anybody can create their own modifications on the system depending on what type of smart contract applications they want to run. Ethereum smart contracts have made to possible for startups to raise funds through the internet, through the now infamous initial coin offerings (ICOs).
Is Ethereum different from Bitcoin?
While both of them are cryptocurrencies running on blockchain technology, they are fundamentally different. One of the key differences between the two is that Ethereum block time is between 14 and 15 seconds, thanks to its application of a system known as the ghost protocol. On its part, Bitcoin’s block time is around 10 minutes. This means that Ethereum transactions are way faster than those of Bitcoin, making it more efficient.
The two cryptocurrencies are also different in their operational models. While Bitcoin block rewards after every 4 years, the Ethereum platform produces the same amount of Ethereum annually forever. This simply means that there is a cap on the number of Bitcoins that can ever be mined, but Ethereum will always be produced.
Bitcoin and Ethereum also differ in the way they started. While Bitcoin was developed and implemented by a small group of individuals, Ethereum was crowdfunded. This means that over time, most of the Ethereum in circulation will be in the hands of miners, while a significant number of Bitcoins will always be in the hands of the people who first developed it.
The two also differ in the way mining is done. Bitcoin is mined through ASICS which means that mining is largely concentrated in the hands of a few individuals. This is in stark contrast to Ethereum which is mined utilizes a memory hard mining algorithm, which makes mining highly decentralized GPU mining.
How can one start trading in Ethereum?
There are two fundamental ways of getting started with Ethereum. The first one is to buy it through an exchange. Most of the major cryptocurrency exchanges out there allow traders to buy and sell Ethereum. This way, you can buy or sell Ethereum depending on the prevailing market sentiment. To make the best decisions on when to buy and sell Ethereum, you can join online platforms like Hashtag investing, where traders and other cryptocurrency experts discuss Ethereum prices in real time.
You can also get started in Ethereum through mining. To make money through mining, you need to get the latest GPU hardware. You also need to familiarize yourself with the prove-of-stake mining protocol which is the mining protocol that Ethereum wants to transition to. However, as a beginner, buying Ethereum through an exchange is the easier and more profitable option.