How is Ethereum similar to Bitcoin?
I think it’s easiest to understand Ethereum by exploring the similarities and differences between Ethereum and a simpler system, Bitcoin. So what are the similarities?
Ethereum has a blockchain
Like Bitcoin, Ethereum has a blockchain, which contains blocks of data (transactions and smart contracts). The blocks are created or mined by some participants and distributed to other participants who validate them.
You can explore this blockchain here: https://etherscan.io
Blocks form a chain by referring to the hash or fingerprint of the previous block. See a gentle introduction to blockchain technology for a primer.
Ethereum is public and permissionless
Like Bitcoin, the main Ethereum network is a public, permissionless network – ie anyone can download or write some software to connect to the network and start creating transactions and smart contracts, validating them, and mining blocks without needing to log in or sign up with any other organisation.
In general, when people talk about Ethereum they mean the main public permissionless instance (version) of the network. However, like Bitcoin, you can take Ethereum software, modify it slightly and create private networks that aren’t connected to the main public network. The private tokens and smart contracts won’t be compatible with the public tokens though, for now. For more on the difference between public permissionless and private permissioned networks, see confused by blockchains? Revolution vs Evolution
Ethereum has Proof-of-Work (PoW) mining
Like Bitcoin, mining participants create valid blocks by spending electricity to find solutions to a mathematical puzzle. Ethereum’s PoW maths challenge called Ethash works slightly differently to Bitcoin’s, and this allows common hardware to be used for mining. This reduces the efficiency edge of task-specific hardware known as ASICs, which are common in Bitcoin mining.
For more on mining see a gentle introduction to bitcoin mining.
On Ethereum’s roadmap there is a plan to move from electricity-expensive Proof-of-Work mining to a more energy-efficient Proof-of-Stake protocol called Casper, in a future release of the Ethereum software called Serenity.
Ethereum has an inbuilt cryptocurrency
Ethereum’s token is called Ether, shortened to ETH. This is a cryptocurrency that can be traded for other cryptocurrencies or other sovereign currencies, just like BTC. Its current value is around US$13 per ETH token (Oct 2016). Token ownership is tracked on the Ethereum blockchain, just like BTC ownership is tracked on Bitcoin’s blockchain, though at a technical level they track them in slightly different ways.
For more on cryptocurrencies and tokens see a gentle introduction to digital tokens.
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A feature of most cryptocurrencies is that they have been designed to slowly reduce production. Consequently, only a limited number of units of the currency will ever be in circulation. This mirrors commodities such as gold and other precious metals. For example, the number of bitcoins is not expected to exceed 21 million. Cryptocurrencies such as ethereum, on the other hand, work slightly differently. Issuance is capped at 18 million ethereum tokens per year, which equals 25% of the initial supply. Limiting the number of bitcoins provides ‘scarcity’, which in turn gives it value. Some claim that bitcoin’s creator actually modelled the cryptocurrency on precious metals. As a result, mining becomes more difficult over time, as the mining reward gets halved every few years until it reaches zero. It is decentralized; there is no singular authority that controls it, and instead it uses encryption based on blockchain technology, calculated by multiple parties on the network, to verify transactions and maintain the protocol. Incentives are given by the protocol to those that contribute computing power to verify transactions in the form of newly-'mined' coins, and/or transaction fees. In other words, by verifying and securing the blockchain, you earn some coins.All of you who are involved in this, right now, are making history.bitcoin бесплатные bitcoin x If you are ASIC mining, your hardware likely comes pre-installed with mining software. If you are CPU or GPU mining, you will need to choose your own software, keeping security in mind. A software package could contain malware. You should also watch out for other tricky, if not outright malicious, behavior. It's easy enough to find yourself accidentally mining on behalf of the software's developer because their system configures their worker as the default.капитализация ethereum ethereum алгоритм форумы bitcoin ethereum 1070 forecast bitcoin 2018 bitcoin
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