Ethereum
has received a lot of attention since its announcement at the North
American Bitcoin Conference in early 2014 by Vitalik Buterin. The
natural consequence of its rising popularity has been its constant
comparison to Bitcoin, the first virtual currency. It is important for
investors to understand the similarities and differences between
Bitcoin and Ethereum.
Bitcoin
Bitcoin, the first virtual currency, was born nine years back in 2008. It introduced a novel idea set out in a white paper by
the mysterious Satoshi Nakamoto: Bitcoin offers the promise of lower
transaction fees than traditional online payment mechanisms and is
operated by a decentralized authority, unlike government-issued currencies. There are no physical Bitcoins, only balances associated with public and private keys.
Over these years, the acceptance of the concept of a virtual currency
has increased among regulators and government bodies. Although it isn’t
a formally recognized medium of payment or store of value, it has
managed a niche for itself and continues to coexist in the financial
system despite being regularly scrutinized and debated.
Blockchain
The attempts to understand Bitcoin more closely resulted in the discovery of blockchain,
the technology that powers it. The blockchain is not just the hottest
topic in the fintech world but also a sought-after technology in many
industries.
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