People seem to confuse Bitcoin’s use of blockchain technology and Ethereum’s use of smart contracts. But they’re fundamentally different. Bitcoin uses the blockchain as a distributed database to manage and track the ownership of transactions. Ethereum uses the blockchain to create “smart contracts,” which are programs that execute automatically when certain conditions are met. The primary difference between the two? The first one uses the blockchain to create a completely decentralized database. The second one uses it to create smart contracts.
So, Bitcoin makes it possible to transfer money without the need for a bank. Ethereum makes it possible to automate many business processes. In other words, the technology behind Bitcoin can completely revolutionize money, but it does so in a way that doesn’t require the centralized control that “legacy” financial systems require. Blockchain technology is better for managing assets, but smart contracts can be used to automate many kinds of business processes, so people are quick to compare the two. Ethereum Has Become Mainstream Ethereum is more than just a cryptocurrency. It’s a platform. A platform means that the Ethereum blockchain can interact with other platforms. It has a very large open source community, over 27,000 developers, and the support of major players like JPMorgan Chase (NYSE:JPM), Microsoft (NASDAQ:MSFT), Intel (NASDAQ:INTC), and Cisco (NASDAQ:CSCO). The problem? It hasn’t yet reached the mainstream.
The obvious reason is the cryptocurrency aspect. Consumers are not interested in an investment with no actual value in it. They also don’t understand how Ethereum’s blockchain works. We need to solve that problem before Ethereum can make it big. Smart Contracts: The Smart Ones Are Still in Hibernation While we wait for Ethereum to improve its utility to the average investor, we have the opportunity to explore other blockchain platforms.