Comparative Analysis of Blockchain Applications: Bitcoin and Ethereum

This report provides a comprehensive analysis of two prominent blockchain applications: Bitcoin and Ethereum. It explores their respective fields and purposes, detailing how they function and the unique features they offer. The report delves into the working models of both Bitcoin and Ethereu...Read More

Running head: BLOCKCHAIN APPLICATIONS
Block chain Application
Name of the Student
Name of the University
Author note

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Table of Contents
Introduction.................................................................................................................................................2
Discussion................................................................................................................................................2
BitCoin.....................................................................................................................................................2
Field and Purpose of BitCoin................................................................................................................2
Working model of Bitcoin....................................................................................................................2
Scalability issues..................................................................................................................................2
Features and Weaknesses of BitCoin...................................................................................................3
Socio-Technical aspects.......................................................................................................................3
Ethereum.................................................................................................................................................3
Field and Purpose of Ethereum...........................................................................................................3
Working model of Ethereum...............................................................................................................4
Scalability issues..................................................................................................................................4
Features and Weaknesses of Ethereum..............................................................................................4
Socio-Technical aspects.......................................................................................................................4
Conclusion...................................................................................................................................................4
References...................................................................................................................................................6

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Introduction
Block chain is a widely growing technology that has found its place in every sector with
emphasis on removing vulnerabilities in the current network technologies [1]. The block chain is
emerging rapidly and it is used for crypto currency where blocks are in chronological form and they are
connected to each other [2]. The block chain applications that are described are BitCoin and Ethereum.
The purpose of this report is to desbribe block chain applications, BitCoin and Ethereum in terms of
given aspect.
The structure of this report is block chain applications description in terms of purpose, working,
scalability issues, features and weakness and socio-technical aspects of the applications.
Discussion
BitCoin
Field and Purpose of BitCoin
The field where BitCoin is used is the area in banking and merchandising till now however, it is
going to be used for every day payments where daily purchases will occur. The purpose of BitCoin is to
provide transactions without any interference from human or banks [3]. The international payments
through BitCoin is easy and low cost due to BitCoin being extended to every country. There is no fees for
credit card which makes it beneficial for small businesses. BitCoin are also bought as an investment to
expect that its value will go up in future.
Working model of Bitcoin
The BitCoin comes in a digital wallet and when the wallet is installed on the computer then it
will generate a Bitcoin address initially for first time. This Bitcoin address is shared with people with
whom an individual wants to have transactions of payment. The payment transaction works where
Bitcoin address is used only once. A private key is kept by the digital wallets that is used to verify the
transaction that has come from the owner [4]. The private key ensures that the transaction is not
changes in between the flow. The mining is another process in Bitcoin that ensures the validity of the
transactions, in chronological order in the block, in the network. The mining also prevents adding of any
other block in the BitCoin wallet.
Scalability issues
The scalability issues of Bitcoin are that there exists a limit of transaction of maximum amount in
the Bitcoin network. The Bitcoin is fastest technology but it has failed as an instant payment system due
to increased transaction fees and transactions having high confirmation time [3]. The scalability issue in

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Bitcoin is determined through its size which needs to grow to accommodate the quick and maximum
transaction. However, there are solutions and the major solution is to increase block size.
Features and Weaknesses of BitCoin
Features
Validation- Full validation of payment transaction with improved and enhanced security that helps to
prevent third party from interfering.
Privacy- The advanced privacy prevent others from linking to the payment transactions.
Security- The better security provides prevention from any modification of hacking through added
resources.
User Interface- The user interface is great providing reliability to the users
Weaknesses
Loss of wallet- The digital wallets cab be lost in case of virus corrupting data or crashing of hard drive.
Fluctuation of Bitcoin valuation- The Bitcoin is fluctuating as per user’s demand that results in less
valuability of Bitcoin.
No buyer protection- There is no confirmation from sellers that the goods bought through Bitcoin will
be the same good delivered by the seller and the reversal of transaction will not be done [5].
Unknown technical issues- The Bitcoin is still emerging and thus the technical errors are unknown to the
recent world.
No guarantee for valuation- The Bitcoin is not governed by and central authority and thus there is no
guarantee of Bitcoin will provide valuation.
Socio-Technical aspects
Bitcoin has more social aspects than the technical aspects in the current scenario in the
environment of socio-technical aspects [6]. The financial assets of Bitcoin are more focused and it is
majorly used for financial aspects. The social aspects are conjointly used with technical aspects that
helps Bitcoin to have greater impact on people using it.
Ethereum
Field and Purpose of Ethereum
The field where Ethereum is used is smart contract interaction. The smart contracts is the field
where Ethreum is used majorly due to its capability. The Ethereum is used in areas of voting processes
and financial exchanges [7]. The purpose of Ethereum is that it is used as a digital currency for trading
and used to run applications on a computer. The other purpose is to monetize the working environment.

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The Ethereum is also used for Smart Contracts, cryptographic boxes containing value that will unlock if
particular conditions are fulfilled.
Working model of Ethereum
The Ethereum works in a different way were languages are used by developers are their own
languages. The developers are allowed to write their own language feasible to them. The Ethereum also
provides allowance for developers to develop their own smart contracts [8]. The Etherum works as
multi-signature accounts, managing of agreements between customers, utility providing to other users
contracts and information is stored regarding an application.
Scalability issues
The scalability issue of Ethereum is that the limit of the transaction is going overboard and this
has caused problems related to Ethereum [9]. The increased number of transaction has led to increase
in cost of transaction that results in compromising of transparency and donation related to mining fees
is wasted.
Features and Weaknesses of Ethereum
Features
Developers raising funds- The developers can raise funds for several applications. This feature is the
most beneficial feature of Ethereum.
Decentralization- The decentralization offers storing and accessing of transactions with ease and
without and hassle.
Trust- The improved cryptographic signature has contributed in more security of Ethereum use.
Quick- The storage and transferring of data on the platform Ethereum is quick and very much reliable
with retaining of trust, security and privacy.
Pseudonymous- The cryptographic signature allows people to identify and prove their ownership to the
receiver without revealing their identity.
Weaknesses
Non-scalability- The Ethereum fails to provide a satisfiable scalability for payment transactions.
Weak coding- The weak coding on Ethereum leads to vulnerability towards cyber-threats.
Lower value- The currency value of Ethereum is lower than Bitcoin currency value that results in more
adoption of Bitcoin.
Socio-Technical aspects
The socio-technical aspects of Ethereum are that the financial aspects of Ethereum is more
focused due to its main purpose to trade digital currency [10]. The positive impact is that conjointly

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using social and technical aspects of Ethereum is that they are valuable for mainly financial aspects and
trust.
Conclusion
The report discussions shows that block chain technology is the growing technology that has
high potential to disrupt the future scenario. The block chain applications discussed in this report are
valuable and they are the major technologies in the current world. The factors discussed in this report
for Bitcoin and Ethreum is that they are most suitable and valuable applications for organizations and
everyday use. However, they are in their early stage and hence their potential issues must be taken into
account to mitigate the future risks. Therefore, there are challenges but with proper improvement the
block chain will be more useful in future.

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References
[1] V. Alcazar, "Data you can trust: blockchain technology", Air & Space Power Journal, vol. 31, no.
2, pp. 91-102, 2017.
[2] M. Nair, and D. Sutter, “The Blockchain and Increasing Cooperative Efficacy”. Independent
Review, 22(4), 2018.
[3] T. Todorov, “BITCOIN–AN INNOVATIVE PAYMENT METHOD WITH A NEW TYPE OF INDEPENDENT
CURRENCY”. Trakia Journal of Sciences, 15(1), pp.163-166, 2017.
[4] K.F. Low, and E.G. Teo, “Bitcoins and other cryptocurrencies as property?”. Law, Innovation and
Technology, 9(2), pp.235-268, 2017.
[5] Y. Sompolinsky, and A. Zohar, “Bitcoin's underlying incentives.” Communications of the
ACM, 61(3), pp.46-53, 2018.
[6] S. Delgado-Segura, C. Tanas, and J. Herrera-Joancomartí, “Reputation and Reward: Two Sides of
the Same Bitcoin”. Sensors, 16(6), p.776, 2016.
[7] G. Greenspan, 2016. “Payment and exchange transactions in shared ledgers”. Journal of
Payments Strategy & Systems, 10(2), pp.172-180, 2016.
[8] Sehra, R. Cohen, and V.Arulchandran, “On cryptocurrencies, digital assets and private
money”. Journal of Payments Strategy & Systems, 12(1), 2018.
[9] J.M. Woodside, F.K. Augustine Jr, and W. Giberson, “Blockchain Technology Adoption Status and
Strategies”. Journal of International Technology and Information Management, 26(2), pp.65-93,
2017.
[10] K.A. Sontakke, and A. Ghaisas, “Cryptocurrencies: A Developing Asset Class”. International
Journal of Business Insights & Transformation, 10(2), 2017.