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Reddit ether or bitcoinBitcoin vs. Ethereum: What's the Difference?
The way it often works in practice is that some contracts are upgradable and some are intentionally not upgradable. You are a youtuber and you go every month to Google to get your paycheck. Google says we had this number of views and this is your percentage. You are not completely sure if Google says the truth. You have to trust Google that they don't lie about the number of the views.
If a service like youtube is built on Ethereum you don't have to trust anyone! Same goes for online casinos and many other projects! Or, another example - about a year ago Google said you need at least subscribers to be monetized. They also required a certain amount of yearly views. So people who had built up channels for years and had subscribers or whatever were suddenly demonetized, without any input into the decision. Something built on Eth or in a decentralized way couldn't just change the rules on you.
Like what counts as a view? The goal of not having to trust internet strangers is a huge accomplishment that is being developed for tons of uses. I'm not sure how you don't see "you can trust everything on the new internet" as anything other than a massive improvement over the traditional system we use like Facebook PayPal etc You still have to trust people you deal with in real life but to not have to trust a complete stranger is HUGE.
I certainly agree the current institutions are bad but I am not sure if this is the correct way to improve on them. A person has to make the video or watch the video. How can you stop them from gaming or violating the intent of your machine?
It seems to me the solution to our problems are MORE people minding and thinking about the tools we use and not less. This is incorrect, because you still will always need oracles to get off-chain data onto the chain.
No because there is no upstream, all of the code is visible and immutable, so once is out there and has been audited and considered fair by people who understand the code if the owners of EtherTube wanted to make changes such as this they would need to launch EtherTube 2, and users could simply not switch if they didn't wanted to. Because Ethereum is decentralized, it cannot be shutdown.
See government shooting down FB's Libra coin. Because then you are putting your trust in a third party, in this case the accounting software company, to do things correctly. You may have to pay them to use their software. If that company goes out of business you will have to figure something else out. On the blockchain, there is no 3rd party at all. The logic and distribution of funds happens automatically, with no 3rd party intervention, and a minor fee compared to the cost of the accounting software.
For my example, no, not a lot other than the fact that crypto transactions are faster and quicker than legacy financial systems. It's basically a blockchain federal reserve, but completely automated and controlled only by token holders.
It comes with the benefits of decentralization too. If you want to use a centralized accounting software, then do it, but if you want the option of a decentralized software, you have the freedom to do that too. To answer your questions "what problem does this solve": it solves the problem of having a singular person controlling software that interacts with s or thousands or millions of people. Imagine if instead of Jeff Bezos owning amazon, everyone who uses and interacts with amazon owns stake in it.
That in itself provides a plethora of solutions. Something like this is more useful in something like movie or music royalties, where none of the parties are trustworthy or trusted. A song makes money from YouTube, YouTube sends it to a smart contract, which splits it up among promoters, artists, studios, etc, all without having to trust the weasels in the music industry.
As most decentralized things solves the problem of trust. Edit: Not to mention that accounting softwares don't solve any problems that you couldn't with pen and paper, it's just a lot easier to input the numbers and have the results, just as it is much easier to input the money and have it spread as it should automatically.
For starters you're most likely to get better partners and employees if you're honest and transparent. Also it's easier that this distribution happens automatically than it would be to process it by hand.
All in all a honest company only has benefits from it, other than the initial complication of setting the system up the only reason would be to being able to cheat in the distribution. This is not a particularly good example. In Bitcoin you'd just create a single transaction with 10 outputs. Somebody could for example create a decentralised uber or Airbnb on ethereum. Lets take uber for an example:. Somebody opens a contract requesting a ride.
Let us assume the reputation was flawless and the driver decides to execute the contract. Users could directly transact with the providers without needing to go through a third party company. In ethereum there is no central service provider which both parties need to rely on to take or provide the service. Lets say the taxy lobby managed to outlaw uber in a whole country.
All the uber drivers in that country would now be fucked and would be jobless. Decentralised contracts on ethereum cannot be stopped or silenced this way so the drivers would have been better of using it instead of uber.
There is also the additional point that uber takes a certain fee for matching drivers with clients. If users and providers can transact directly with each other in a safe way both can save money by not relying on third parties. They also have severe problems with censoring certain kinds of payments so most innovation currently is focused on that part. Ethereum can take any kind of dependance of a third party and replace it with code running on the blockchain.
Of course there are many edge cases that have to be analysed for every use case. Especially if physical services are involved like driving somebody around. What happens if the driver doesnt show up? What if the driver throws the client out halfway on the route? For this system to work all this data somehow needs to be brought on the blockchain and verified which is not an easy task especially since data can be easily spoofed. Contracts that rely on nothing but data already available onchain are a lot easier to create.
For example golem or storj where providers can rent out their computation power or storage space those who need it. A blockchain is like a special kind of database.
Bitcoin is a database of basically account balances, while Ethereum is a database of account balances, computer code smart contracts and storage for that code. In its most basic form they do resemble a series of receipts. But smart contracts allow them to be so much more than to prove a transaction has happened. Tokens and ICOs: Hundreds of ICO's were successfully launched with ethererum because anybody can create any token they like with any properties they like.
This is and example of fungible tokens, like the change in your pocket where one coin is exactly the same as another, is interchangable and holds the same value. Cryptokitties: Unique, non-fungible tokens that each have their own value and can be collectable in and of themselves.
Not only that, these non-fungible tokens have a DNA contract by which they can produce child tokens of their own value. Kind of crazy right? I know this probably sounds pretty abstract, but people have literally lent themselves hundreds of millions of dollar based on their own ETH holding and the expectation that ETH is likely to increase in value. This give them liquid capital in the meantime, or capital they can use as further leverage on the market. Quorum: JP Morgans open source crypto project, takes an Ethereum blockchain and makes a private version compatible with all kinds of banking rules, regulations and practices all while maintaining potential full interoperability with the main public Ethereum chain.
However, one thing I can't do with ethereum is buy anything with it. As far as I know, there is no way to actually convert eth directly into goods and services yet, unlike Bitcoin which is accepted at many places.
Consider Bitcoin as the digital value foundation. It is the slow moving, high value Blockchain which supports the crypto economy. Smart contracts were something envisioned in the original Bitcoin whitepaper, but that doesn't necessarily mean they have to be a part of Bitcoin itself.
Look at the ethereum faq, it clearly states that ETH is not a currency. It is the token which will power the engine that runs the crypto economy. To take the payroll example As clients and customers pay with Bitcoin, the smart contract keeps track of it. Then when payday rolls around, the smart contract will pay out from that Bitcoin wallet or even litecoin to the employees. Much like a rope is made from multiple weaker strings, the twining of separate blockchains will make the whole system overall more resilient.
Jack of all trades, master of none. Specialized blockchains filling a specific niche or need will be important. The other thing that people don't realize is that we are at the infancy of this revolution. People are just starting to figure out the most basic structures around smart contracts. I would argue that we are still in the alpha stage of most smart contracts where the developers and users are just starting to architect the next wave of dapps.
The goal should not be defeat of Bitcoin, for Bitcoin is not the enemy. The enemy is the established systems of control which are closed, guarded, off limits to the people. ETH enhances the utility of Bitcoin and vice versa. A simple example is escrow.
If you want to put money in escrow for a big purchase right now you need to hire a bank to do that for you. The bank charges a hefty fee for that. Ethereum is programmable money so you can program a contract to fulfill the same purpose for an extremely minimal cost. You've been given some good answers. I'll point out the question is kind of similar to how the Internet was going to be useful in the 90s. There was and still is a lot of money to be made coming up with good ideas in this regard.
For example, on Ethereum it's possible to create an autonomous asset exchange - like Bancor or Uniswap. These exchanges in principle can work without an owner or administrator. In practice they're often designed to be upgradeable by the creator. Im curious if you dont mind- What are some of the most used programmable tasks currently happening on the ethereum network?
All of this can be done with Ethereum. The difference between Ethereum and the traditional financial system, though, is that you can or will be able to do all of this without a bank Goldman Sachs, Citi, Bank of America, etc , payment processor Paypal, MoneyGram, Western Union , or insurance company. In other countries this could be many more industries or types of people including minority religious organizations, political dissidents, journalists, people with low social credit score - im looking at you China , etc.
Ethereum differs from Bitcoin in that in Bitcoin you can't save or invest it without relying on an intermediary. In my opinion, that makes Bitcoin less useful - I have no use for a payment system which is a narrative the Bitcoin community seems to be moving away from in favor of "Bitcoin is a Store-of-Value" centered on a cryptocurrency that isn't able to be saved or invested.
EDIT: This is obviously not the case for everyone. But for me, living in a relatively-stable, developed country, i want to do more with my money than send it to a landlord to pay my bills lol. Ethereum's additional functionality smart contract interaction through the EVM makes it much more versatile in creating applications for ETH that would see it ultimately succeeding around the world while maintaining no need for an intermediary.
In pretty much any instance where you would be able to "use" BTC besides sending money to someone which is something the BTC community seems to be moving away from , you need an intermediary. If you wanted to save for retirement invest in businesses or specific business ventures or real estate using BTC as you would a USD or CAD or EUR, you can't do that without having someone take on the risk, and custody of your coins.
Oh you are talking about investing though a token vehicle like a security token? This is a very advanced use-case, obviously, but you get the idea. Right now we're still at an early stage of development - Some people are using the term "money-blocks" to describe what's being built now.
We are only creating the building blocks right now, I. As long as we keep it open, permission less and decentralized the sky is the limit ;. ETH is 'programmable value'. Say for example that you are my employee and I am the employer.
Say that you are willing to work for me, but that you don't really trust me to work for a whole month before I pay you. As an employer I don't really want to pay you every day because the overhead to do that would be ridiculous. I could agree to deposit 1 months wages into a 'smart contract' which is the set of program instructions that govern this transaction.
I could then tie that contract into my timecard system and my tax calculation system such that every minute you worked you were paid. Not credited toward a paycheck you'd get in a few weeks, but more like you could sit at your desk and watch your balance increase every minute as long as you were clocked in.
I could also have a similar counter going for your taxes, which could be deposited directly with the relevant governments. This is a trivial example because I am not the person creative enough to develop useful applications but you get the general idea - money or tokens of other types of value that do things, change hands, transform, etc based on information from anyone or anything with internet connectivity.
What he means is Ethereum is much more agile and being programmable can do anything your imagination can conjure up. I haven't heard of any platforms built on Bitcoin that allow for this. EDIT - Would be cool if you would educate me instead of just down-voting. Bitcoin, at it's core, allows you to invest where you maintain sole access to your funds, but can generate interest? Is there a product i can use to do that right now? I have some bitcoin i can use. Open to trying it out.
Bitcoin can be used to move bitcoin, ethereum can be used to create an entire ecosystem of financial services. You missed the entire point that Bitcoin is a decentralized payment system and Ethereum is a platform for making decentralized applications and systems. That's why Ethereum is the best.
It can do what Bitcoin can do along with anything else that can be thought of. This is wayyyy off topic. If the guys a noob you probably just confused him. Just answer the question. Useful post! I learned a few things.
I would add that, in addition to enabling people in repressed countries to access to send and receive money, it also enables criminals to do the same. Definitely a double edged sword. Criminals have always and will always find ways around rules.
If there's an incentive for them to do so, they will always do so. In my opinion, that should never be a barrier for holding back growth c:. There is tremendous scrutiny on organized crime, and a lot of that happens through following the money. In turn, while many criminal enterprises launder their money, there are absolutely massive losses in the laundering process and a paper trail for authorities to follow.
I suppose it depends on what the development outcome is for most of the well-used cryptocurrencies. As it stands now, privacy on most of the major cryptocurrencies is a joke. That comes with the added benefit of having all transactions be trackable.
Exchanges coordinate to stop malicious funds being transacted into fiat currencies daily. They also coordinate with LE and security organizations doing independent review. Its currently significantly easier to track funds from security-related events than it would be with cash, and in some instances the banking system.
Reaction time for these types of events in crypro can be in minutes, not hours or days. This extends to much of the malicious activities using crypto including darknet markets, extortion, traffiking, etc. After reading this, I might be speaking out of my depth and I ought to educate myself a bit more. Thanks for the insight. I don't think you understand Bitcoin or Ethereum on a technical level very well and I'm confused why you're so upvoted.
Better to point the people towards well crafted sources. Also I do think there's a difference between sending someone on to read a bunch of stuff and succinctly answering their question here and now. It certainly is nice, and I support that. But the quality of the information might not always be as good. For the first X years of the network, the software was designed to pay extra bitcoins to miners as well, with depreciating rewards until some specific number of total network transactions.
After that moment, miners will be rewarded with only transaction fees. This model allows for software developers to create smart contracts that are easy to distribute to others with a built-in back-end place to store the data.
The result is a decentralized network where you can create DApps decentralized apps with relatively low startup cost vs. There are a lot of subtleties I have abstracted away from both descriptions to keep it simple and any errors are both likely and mine alone no pun intended. The reality is that the execution of the ethereum vision is still underway - the entire project is still in beta kinda and there is a lot of work to be done and years to go to make it truly kick ass. I am quite bullish on the idea and love the energy of the community.
Both are born of a common ancestor, the original Bitcoin whitepaper, but perform complementary functions. For most of its history since the mid launch, ether has been close behind bitcoin on rankings of the top cryptocurrencies by market cap. Your Money. Personal Finance. Your Practice. Popular Courses. Part Of. Bitcoin Basics. Bitcoin Mining. How to Store Bitcoin.
Bitcoin Exchanges. Bitcoin Advantages and Disadvantages. Bitcoin vs. Other Cryptocurrencies. Bitcoin Value and Price. Cryptocurrency Bitcoin. Key Takeaways Bitcoin signaled the emergence of a radically new form of digital money that operates outside the control of any government or corporation. With time, people began to realize that one of the underlying innovations of bitcoin, the blockchain, could be utilized for other purposes. Ethereum proposed to utilize blockchain technology not only for maintaining a decentralized payment network but also for storing computer code which can be used to power tamper-proof decentralized financial contracts and applications.
Ether was intended to complement rather than compete with bitcoin, but it has nonetheless emerged as a competitor on cryptocurrency exchanges. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts.
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