Bitcoin and Ethereum are both blockchain protocols. Bitcoin was initially thought to solve the money use case, where the blockchain is used as a trustless entity that enables two parties to transact without an intermediary. Ethreum was thought of as a modular and programmable blockchain, enabling the development of decentralized apps on top of that. So, where Bitcoin looks more like digital gold. Etehreum looks more like the Internet protocol.
Understanding the key differences between Bitcoin and Ethereum
To understand the key difference in how Bitcoin and Ethereum work, let’s look at two consensus mechanisms:
Where Ethereum has born as a proof of work blockchain, it has transitioned more toward proof of stake with what has been called The Merge.
This has been a process of transition from proof of work to proof of stake, which took years to implement from the core of Ethereum’s development team.
Indeed, Ethereum, by transitioning toward Ethereum 2 integrates mechanisms like proof of stake and sharding that enable it to become more scalable than Bitcoin’s protocol.
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