A blockchain is a large digital ledger and both Bitcoin and Ethereum have separate blockchains. The Bitcoin blockchain is a P2P (peer-to-peer) electronic cash transaction system, which means all intermediaries were eliminated and there was no central governing body. The Ethereum blockchain took it one step beyond just the documentation of transactions. However, both, Bitcoin and Ethereum, seem well poised to add value to financial processes in the future.
Bitcoin and Ether together command the lion’s share of the crypto market. Due to their massive market share, people often pit them against each other. However, they are both designed to perform different tasks and achieve different goals and even complement each other in many ways.
To understand the difference between the two, it is important to delve a bit deeper into the underlying technology for these digital currencies – the blockchain.
What is Blockchain Technology?
Bitcoin and Ethereum are both based on blockchain technology. This means that information is stored in blocks and connected through permanent chains. Each block contains information about a set of transactions within a specific period. As the time frame changes, the block changes, and a new one is added to the chain, each block reliant upon the preceding block. This is why it is called Blockchain.