Bitcoin is definitely the center of attraction but Ethereum is something that can actually change the world. Ethereum has the potential to truly decentralize the internet. Isn’t that fantastic?
Are you new to this whole ‘decentralization’ thing? If yes, then this article has certainly got you covered. This guide will help you understand the concept of decentralization in layman’s terms and learn how Ethereum is different from Bitcoin.
(Ethereum is a platform. Ether is a currency.)
What is Decentralization?
Let me explain this to you with the simplest example. There’s this photo editing app that you like the most because of its certain features. Now, one day you wake up and find that your favorite features are removed without even letting you know. Ouch! But why would the company even bother to tell you? It’s not decentralized, right?
Take another example of Twitter – there are millions of users but the full authority goes to a single organization. This is called centralization.
By definition, decentralization is the transfer of decision-making authority and responsibility from a centralized organization to a distributed network.
People across the globe are praising the concept of decentralized apps. Now you might be wondering what exactly is a decentralized app (dApp).
A decentralized app (dApp) is software that operates autonomously through smart contracts (self-executing programs stored on a blockchain). Instead of a single computer, a dApp runs on a peer-to-peer blockchain network.
Imagine a developer can create a decentralized app that is not controlled by any single authority. Awesome!
The man behind the Ethereum Blockchain – Vitalik Buterin was influenced by the same situation. He observed that everything is either controlled by the government or any private company, which he found a bit evil. That’s where the history of Ethereum began. But before we dive into its history, let’s first find out “What is Ethereum Blockchain ?”
What is Ethereum Blockchain?
Now that I’ve briefly explained the concept of decentralized apps, it would be a bit easier for you to understand the Ethereum Blockchain.
Ethereum is a community-built technology that powers the hottest cryptocurrency ‘Ether’ and multiple decentralized apps. Ethereum comes with smart-contract functionality. Anyone can easily get access to digital money and data-friendly services through Ethereum Blockchain.
No government or company can interfere with the services you use on Ethereum. You can send Ether (ETH), the native cryptocurrency of this platform to anyone for a small fee.
Some people call Ethereum a “DIY platform for dApps”. Anyone can create a decentralized program on Ethereum but before that, you have to learn the Ethereum programming language (Solidity).
Currently, Ethereum is the world’s most popular programmable blockchain. Several developers use this platform to build decentralized applications for users across the world.
- In 2013, the programmer Vitalik Buterin described Ethereum in a white paper and it went live on 30 July 2015.
About Ethereum Cryptocurrency/Coin – Ether
Ether (ETH) is the second largest cryptocurrency after Bitcoin by market capitalization. This cryptocurrency/coin is powered by Ethereum Blockchain. Here are some important facts about Ether:
- Ether is the same as Bitcoin – a digital currency.
- You can control your own Ethereum cryptocurrency with no involvement of any third party.
- Similar to Bitcoin, Ether is also secured by cryptography.
- You can send Ether to anyone through peer-to-peer networks. No intermediary services like banks are involved.
- No bank or company controls the Ether. It is completely decentralized.
The one thing which I find fascinating about cryptocurrencies is that anyone can avail their benefits. As it’s available in flexible amounts, you don’t have to buy one whole Ether. You can buy Ethereum cryptocurrency in fractions. Now that sounds appealing, right?
Ethereum Vs. Bitcoin – Comparison
Everyone wants to know who’s going to win this battle – Ethereum or Bitcoin. If we look at the features and services that both these crypto giants offer, Ethereum seems a bit ahead of Bitcoin. Ethereum is more than just payments and offers a marketplace for decentralized apps and smart contracts. You can buy both Bitcoin and Ethereum on any cryptocurrency exchange.
Let’s take a look at these points for a detailed Ethereum Vs. Bitcoin Comparison:
- Ethereum is considered faster than Bitcoin. The time between blocks in Bitcoin is around 10 minutes which is more than 14 seconds in Ethereum. It means Ethereum writes to its database every 14 seconds while Bitcoin does the same every 10 minutes.
- Bitcoin uses primitive scripting language while Ethereum uses more advanced and developer-familiar codes that run as smart contracts.
- You might have heard that Bitcoin has a fixed supply of 21 million coins. To manage this fixed supply, Bitcoin generation halves every 4 years. Now because Ether has no fixed supply, it continues to be generated at a constant rate.
- There are also certain differences in the mining rewards for Bitcoin and Ethereum.
- There are some longtime fans of Bitcoin including Elon Musk and Snoop Dogg. Now, our hottest cryptocurrency ‘Ether’ may lack this celebrity endorsement. Ethereum is also considered to have a transparent history unlike the mysterious beginning of Bitcoin.
If you ask me, I lean toward the second most popular cryptocurrency ‘Ether’. Why?
The first reason is the celebrity endorsements of Bitcoin. Are they actually using it? Or just getting paid to talk about it? The influence of celebrities makes it difficult for a common person to analyze the pros and cons of the largest cryptocurrency.
Another reason is that the Ethereum blockchain has extensive support from developers. Also, the cryptocurrency market is extremely volatile. This is why choosing the crypto with better price history seems like a better option.
Ethereum Price History Chart
Ethereum’s price history has ups and downs just like Bitcoin. However, the reasons for these variations differ in both cases. You may find different prices of cryptocurrencies on different exchanges. It is because the cryptocurrency exchanges aren’t synchronized with each other. The price of the cryptocurrency on every platform depends on the trader.
I’ve listed the major changes in Ethereum price history in the chart given below. As I’ve already mentioned, the prices may vary on different exchanges due to the size of the market, average estimated price, or exchange volume.
| Year | Ethereum Price History |
| Aug, 2015 | $ 1.25 |
| Dec, 2015 | $ 0.96 |
| Jan, 2016 | $ 2.48 |
| Jun, 2016 | $ 12.49 |
| Dec, 2016 | $ 8.01 |
| Jan, 2017 | $ 10.51 |
| Jun, 2017 | $ 288.28 |
| Dec, 2017 | $ 719.83 |
| Jan, 2018 | $ 1066.72 |
| Jun, 2017 | $ 429.17 |
| Dec, 2018 | $ 131.37 |
| Jan, 2019 | $ 107.57 |
| Jun, 2019 | $ 314.05 |
| Dec, 2019 | $ 132.07 |
| Jan, 2020 | $ 186.26 |
| Jun, 2020 | $ 228.33 |
| Dec, 2020 | $ 746.06 |
| Jan, 2021 | $ 1385.5 |
| 1 June, 2021 | $ 2650.22 |
Ethereum Blockchain is probably one of the most fascinating technologies. Moreover, it is also important to invest in knowledge before you invest in any cryptocurrency. So, keep following the progress.
Disclaimer – As I’ve already mentioned in the guide that the cryptocurrency market is highly volatile. What goes up can also come down. Cryptocurrency markets can convert your $100 to $100k or to $0, which means the market values are quite unpredictable. This is why it’s highly recommended to consult any professional/expert before you make any investment in cryptocurrency.
