Friedman projected the idea that Internet is going to become a leading cause for minimizing the economic concerns of the government. His foremost proposition was that the mass population of the world is going to adapt e-cash in the coming days.
A decade later, bitcoin emerged as one of the most widely accepted digital currency worldwide.
This specific cryptocurrency (Bitcoin) has dominated the market for the past ten years; until, a new player laid its siege in the battlefield. The new element of surprise introduced itself as Ethereum. Vitalik Buterin, the man behind Ethereum released his version of the crypto-nite with a vision of moving the bitcoin technology out of the currency stratosphere and creating it as assets.
So, before we reach a probable predicament that which of the two is a better option to avail, let’s learn how Bitcoin and Ethereum actually works and which of the two can become an optimum mining currency.
Bitcoin: A Quick Premium Cryptocurrency
Bitcoin was initially introduced by Satoshi Nakamoto perceived as a single entity but in actual life, the name represents a group of people. The motivation behind Bitcoin came to a rise after the publishing of the infamous paper “Bitcoin: A peer to peer electronic cash system” which literally described how the bitcoin actually works in the real world. By year 2009, the currency was up in the air and selling like wildfire across the whole of United States.
Initially, when it all began, the cost of a single Bitcoin was around dollar a piece. Today, it stands at an alarming rate of 8,100 dollars. So, yeah if you still think it’s not worth learning what this cryptocurrency is all about, then you, my friend are going on the wrong path to success.
What is a Block Chain?
Before we explain the concept of Bitcoin mining, let me clear you up about the concept of a blockchain. A blockchain is a public ledger which represents all the transactions ever occurred in the realm of cryptocurrencies. Blocks are added to one another in a chronological order so it’s not rocket science to view the entire history of transactions. If you are interested to forecast the market, you may have to perform a thorough research and study over it.
The Aim of Bitcoin Currency
As Bitcoin was launched, the purpose of the bitcoin was a single one indeed. It was to establish a peer-to-peer decentralized payment system free of governing taxes/incurring duties, etc. The purpose was and still is to establish a monotonous payment system among the worldwide population.
And with public ledgers revealed in the form of blockchains, users acquire a total confidence while performing a transaction as every transaction will be legit, free of all fraud. For bitcoin, security and speed plays a vital role when it comes to transactions. Transactions are performed in a C++ powered environment which performs functionalities using a handful number of commands.
The Process of Bitcoin Mining
Bitcoin mining is basically performed with the idea of putting currency into circulation. So how does mining actually works in case of Bitcoin!
The process by which transaction data is distributed within the Bitcoin network; it is validated and stored in a block chain. What miners do is they receive a small amount of fees attached to all such transactions and then successfully validate the currency to be included within the block.
To reach there, the Miners have to earn that block...
Also, the miners charge for what they do! They expend their expenses on processing power to complete transactions and in return they get Bitcoins.
So, assuming that you once process a single block, you get almost around 12.5 bitcoins. And the reward is then sequentially halved after a certain number of blocks are completed. Forecasts represents that the next half-life of the blockchains is due by 2020.
What is Ethereum?
So if Bitcoin is payment system which is incredibly taking over the market then what the heck is Ethereum doing in all this? What is the role of this cryptocurrency! Well, first of all, Ethereum is not only your cryptocurrency but it is a bit more. Since, Bitcoin standardizes itself as a digital payment gateway, Ethereum does establish itself as a digital payment system but comes forth as an infrastructure.
It was initially launched back in 2015. Like Bitcoins, it work with Ethers which is the initial cryptocurrency in which it operates. And to our surprise, Ether’s initial sale skyrocketed up to 60 million. A great start is what brought this crypto-nite an immense support. The block chain technology behind Ethereum became strong and made it stand out among competitors within the market!
How Ethereum Mining Works?
The process of Ethereum mining is pretty much similar to that of Bitcoin.
Each block of transaction is contested among individuals until one of them actually wins the block. The metadatas of the acquired block is run through a critical process called hashing by the miner.
If the miner successfully identifies a hash which fits best to the targeted value, the miner is awarded with Ether in return and the block is then broadcasted across the network. Validation takes place, just like in case of Bitcoins. As soon as the other miner identifies the hash! Then the block is forwarded to the new miner and the previous miner will start working on the next block.
Comparing the Two
Although, Bitcoin does sound like a lucrative option but unlike Ethereum, this cryptocurrency has a cap! There is only a specific number of Bitcoins which can be generated and they are limited to 21 million. Also, the mining process works based on solving complicated math problem every time you are opting to start a new blockchain.
In case of Ethereum things run a bit differently. The process however is totally similar as that of Bitcoin. But in bitcoin you need to wait 10 minutes whereas in case of Ethereum, you only have to wait 12 seconds for a new bitcoin average block to initiate. Also, Ethereum continues to prove itself as the performance oriented cryptocurrency using a specific GHOST protocol.
One great thing about Ethereum is that it creates an infrastructure for miners to establish cloud based mining rigs which can allow other users to benefit the most out of this cryptocurrency termed as the Bitcoin.
Also, rumors are around that Ethereum will be ditching the complicated mathematical problem solving tactic and shift to a token based system. Let’s see in whose favor does the future rolls the ball.