What is Ethereum
Ethereum is a blockchain that went live in 2015. It has its own Ethereum currency called Ether (ETH) and its own programming language known as Solidity. It introduced smart contract functionality to the world of cryptocurrencies, which paved the way for a lot of altcoins.
Why is Ethereum better than Bitcoin?
It powers countless cryptocurrencies built upon its blockchain due to the high programmability it offers. While it uses proof-of-work mining, it plans to switch to a proof-of-stake model when Ethereum 2.0 releases.
This means that any user who owns a minimum of 32 ETH could lock the funds up in a contract and start earning rewards for solving computations required to add new blocks to the blockchain.
Ethereum is not a Bitcoin alternative. It is simply an attempt to improve blockchain technology.
What is Bitcoin
Launched in 2009 by Satoshi Nakamoto, Bitcoin introduced an idea to the world showcased in the white paper "Bitcoin: A Peer-to-Peer Electronic Cash System" that essentially re-shaped the way we perceive currencies. It offered this promise of an online currency that is secured without a centralized authority behind the wheel.
There are no physical Bitcoins available, and they are all just balances that are connected through a cryptographically secured public ledger known as "The Blockchain." Keep in mind that Bitcoin wasn't the first, and there were ones that failed before it. However, due to its success, people started seeing its potential.
Bitcoins or BTC are the native cryptocurrency tokens of the Bitcoin blockchain, which need to be mined by a group of miners. These miners need to validate the transactions using raw computer power, such as GPUs, and once they validate a block, it is added to the blockchain, and they receive newly mined BTC as a reward. This is known as the proof-of-work consensus algorithm.