Almost all of us have been introduced to crypto assets through Bitcoin. With its sudden ups and downs and risky market, it has somehow attracted the attention of all of us over the years.
But Bitcoin is a cumbersome working and costly system. For this reason, it has not been able to go beyond the medium of exchange much, although it has made a technological breakthrough, it has not been able to affect other sectors.
At this point, Ethereum appears in front of us. Ethereum, which works similarly to the Bitcoin infrastructure but turns the system into a giant supercomputer along with all the validators on the network, was discovered by Vitalik Buterin in 2014. The reason for the exit is the cumbersome structure of Bitcoin and the inability to develop applications to the system. As a result, Ethereum has opened a new door.
Ethereum is a completely open-source system, it supports smart contracts and the current version of the Nakamoto Consensus Protocol. Ether cryptocurrency, abbreviated as Eth, is used on the Ethereum network. There is a tariff called a gas fee in the system for a transfer to be made on the Ethereum network. All transfers made on this network are priced according to their content via the gas fee. Transfers are made via smart contracts and processed into the system. It is possible to observe it openly to the whole world through Etherscan.
If we compare Bitcoin with Ethereum:
Although Ethereum is an example of bitcoin, it differs from bitcoin in method and purpose.
A transaction that takes an average of 10 minutes on the Bitcoin blockchain takes 15 seconds on the Ethereum blockchain. Both use mining, but in bitcoin, miner revenues and coin production dropped by half in December, while Ethereum also has more stable production.
While transaction fees in bitcoin are calculated in bytes, Ethereum is also charged with the ETH gas fee, which appears according to the content of the smart contract that performs the transaction. There is a predictable gas fee for transactions on Ethereum, and payments are generally made in GWEI, a subunit of ETH, while bitcoin is paid in units called satoshi, based on the amount of bytes covered by the transaction. In 2017, the average Ethereum transaction was $0.33, while the average bitcoin transaction was $23. Ethereum currently uses a hybrid model that includes proof of work and proof of stake.
In the future, it is planned to use Proof of Stake completely. There is no such situation in bitcoin. As we have explained in this review with basic information, Ethereum is an innovative platform developed using Bitcoin as an example. If we say that bitcoin is a decentralized database, we can say that Ethereum is a decentralized world computer.