Bitcoin and Ethereum are two of the biggest cryptocurrencies in the world. The main difference between these two currencies is that one is based on blockchain technology and the other is based on smart contracts. Both have their own advantages and disadvantages. Bitcoin Bitcoin was created in 2009 by an unknown person using the alias
Bitcoin and Ethereum are two of the biggest cryptocurrencies in the world. The main difference between these two currencies is that one is based on blockchain technology and the other is based on smart contracts. Both have their own advantages and disadvantages.
Bitcoin was created in 2009 by an unknown person using the alias Satoshi Nakamoto. Bitcoin has been around for a long time, but it’s popularity is only growing as the price increases.
Bitcoin can be described as digital cash. It is decentralized and does not rely on any central authority to validate transactions. This means there is no bank or financial institution involved. Instead, Bitcoin is maintained by a peer-to-peer network of users who run nodes on their computers. These nodes verify transactions and add them to the public ledger known as the Blockchain.
Bitcoin transactions are recorded on the Blockchain, which is publicly viewable. As more transactions are made, the Blockchain gets longer and the cost of verifying each transaction goes up.
Bitcoin has been very successful and has seen its price increase from $30 in 2010 to $14000 in 2017.
Ethereum is another cryptocurrency, but unlike Bitcoin, it is not based on blockchain technology. Instead, it uses smart contracts.
A smart contract is an agreement between two parties that is enforced through code. The code will execute once certain conditions are met.
For example, let’s say you want to buy a house. You pay a deposit to a real estate agent and then the contract is signed. Once the contract is signed, the real estate agent cannot change their mind about selling the property to you. If they do, you will receive your deposit back and the contract will be void.
Smart contracts allow you to automate many types of agreements. For example, if you wanted to create a contract where a certain amount of money would be paid to you after a certain amount of time has passed, you could do this with a smart contract.
You could use smart contracts to create a decentralized marketplace, or even a decentralized stock market.
Smart contracts can also be used to make decisions. For example, a smart contract could automatically pay out dividends to shareholders.
Ethereum has also seen a huge increase in price. At the end of 2017, the price was over $1,300 per coin. In early 2018, the price was around $800 per coin.
Which is bigger?
Bitcoin and Ethereum are both successful cryptocurrencies. However, Bitcoin has a larger user base. There are currently over 17 million Bitcoin wallets compared to just over 4 million Ethereum wallets.
Ethereum is still the most popular smart contract platform, but Bitcoin is the most popular cryptocurrency.
Why is Ethereum dropping?
- Market manipulation
- Market saturation
- Lack of development
In 2017, the price of Bitcoin fell from $20,000 to under $7000 in less than three months. Many people thought that the price was going to keep falling and that it would crash.
It did fall further, but eventually started to rise again. The price started rising because the people who had bought Bitcoin at the low price were selling it at the high price.
Some people believed that the price would keep falling until it hit zero. This was known as the “death spiral.”
Many traders believe that this death spiral is what caused the price to drop in the first place.
However, this is not true. The price dropped because there was too much demand for Bitcoin.
Demand for Bitcoin is driven by speculation. Speculators believe that the price will continue to go up and they want to get in on the action. When the price goes up, they sell their Bitcoin and when the price goes down, they buy it back at a higher price.
Speculation can be good or bad. Good speculation is buying something at a low price and selling it at a higher price. Bad speculation is buying something at a high price and selling it at a lower price.
Speculation drives the price up and down. This is why some people believe that Bitcoin should be banned. They don’t like the idea of people making money off of the price fluctuations.
When the price of Bitcoin reached $20,000, it was still below the price needed to cover the cost of mining.
As a result, many new miners entered the market. This drove the price down.
To counter this, Bitcoin developers have released a new version of the software called Bitcoin Core. This version allows for more transactions per second.
If the price of Bitcoin continues to rise, more miners will enter the market. If the price of Bitcoin drops, fewer miners will enter the market.
Bitcoin is regulated in the United States by the CFTC. This means that it is not illegal to buy or sell Bitcoin. However, it is illegal to operate an exchange.
Ethereum is not regulated in the US. This means that it is possible for US citizens to buy and sell Ether. However, it is not legal for US citizens to trade in Ether.
In February 2018, the SEC announced that it will regulate Ether. This means that trading in Ether will be regulated by the SEC.
Lack of development
One of the biggest reasons for the drop in price of Ethereum is the lack of development.
At the beginning of 2018, the Ethereum Foundation had a budget of $15 million. This budget was used to fund development projects.
However, this budget was cut in half in January 2018. This means that development projects are now being funded with only $7.5 million.
There is also a lack of development outside of the Ethereum Foundation. For example, the Ethereum community is not working on a new version of the software.
Instead, they are working on a new protocol called Plasma. Plasma is a new layer on top of the current Ethereum network. It is designed to allow for faster and cheaper transactions.
However, this will take years to develop.
Ethereum has seen a huge increase in price, but the price has also dropped. This is due to market manipulation, market saturation, and the lack of development.
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