Bitcoin and Ethereum are two major cryptocurrencies.
| name | definition | unit |
|---|---|---|
| Bitcoin （BTC） | decentralized currency （known as blockchain 1.0） | Satoshi |
| Ethereum （ETH） | decentralized contract （known as blockchain 2.0） | Wei |
Ethereum has made improvements to Bitcoin's operational issues in system design:
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Shortened block generation time from 10 minutes to just over ten seconds and designed a consensus mechanism based on the GHOST protocol.
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Changed mining puzzle: Bitcoin's is computationally intensive for hash value calculation with specialized mining equipment. Ethereum's is memory hard to resist ASIC chips. Future change will replace proof of work with proof of stake.
In addition, Ethereum supports smart contracts.
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After the success of Bitcoin, people further think about what else we can decentralize.
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Bitcoin replaced government functions with technical means like cryptography and consensus mechanisms.
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Ethereum replaced government judicial means with technical means to maintain the effectiveness of contracts.
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The contract can be implemented by code placed on the blockchain. Through the immutability of the blockchain, the effectiveness of the contract can be guaranteed. Some contracts with simple and clear logic can be written as smart contracts but not all.
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Faster cross-border transfer speed: Decentralized currency like Bitcoin has an advantage in cross-border transfers compared to legal tender as it is faster despite some imperfections.
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Smart contracts are immutable: everyone must execute according to the code rules, ensuring that contract participants cannot default.
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Ethereum's data structure and consensus mechanism;
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Mining algorithms, including the currently used proof of work and the future proof of stake;
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Smart contracts.