CRYPTOCURRENCY 101 ETHERIUM

What is Ethereum and how does it differ from other cryptocurrencies like Bitcoin?Ethereum differs from other cryptocurrencies like Bitcoin in several key ways:

• Smart Contract Functionality: Ethereum's functionality extends beyond being a digital currency to the creation of decentralized applications (dApps) and the execution of smart contracts1. This sets it apart from Bitcoin, which primarily serves as a store of value and a means of exchange.
• Total Supply and Issuance: Ethereum has a different total supply and issuance model compared to Bitcoin. While Bitcoin has a finite supply of 21 million coins, Ethereum does not have a capped supply2. This difference in supply dynamics can impact their scarcity and value over time.
• Blockchain Purpose: Ethereum is a decentralized blockchain platform that supports smart contracts and has its own cryptocurrency named Ether (ETH)3. In contrast, Bitcoin is primarily designed as a peer-to-peer digital currency and a store of value.

Use Cases: Ethereum's standout feature is its smart contract technology, which allows for the development of decentralized applications (dApps), non-fungible tokens (NFTs), and DeFi projects4. This sets it apart from Bitcoin, which is primarily used for financial transactions and as a digital store of value.

• Consensus Mechanism: Ethereum has transitioned from a Proof-of-Work (PoW) consensus mechanism to a Proof-of-Stake (PoS) mechanism, providing a more secure and energy-efficient means of transaction validation and blockchain augmentation5. This transition sets it apart from Bitcoin, which still relies on a PoW consensus mechanism.
• Market Capitalization and Adoption: Ethereum is the second-largest cryptocurrency after Bitcoin in terms of market capitalization6. It has a strong presence in the development of decentralized applications and has experienced significant growth in its ecosystem.

These differences highlight the unique features and use cases of Ethereum compared to other cryptocurrencies like Bitcoin.

Footnotes

1. CryptosHeadlines ↩
2. Atomic Wallet ↩
3. Atomic Wallet ↩
4. Fortune ↩
5. Atomic Wallet ↩
6. Forbes ↩