Gridcoin vs. Bitcoin



Gridcoin vs. Bitcoin: What's the Difference between these Cryptocurrencies?

Gridcoin as a relatively young cryptocurrency is still unknown to many people. Bitcoin, however, as the first and oldest virtual currency, is already present in society and in the media. In addition, Bitcoin enjoys a very high priority in the market for cryptocurrencies. This is reflected above all in the previous financial ratios. The current exchange rate of 6,800 US Dollars for a Bitcoin (as of June, 12,2018) is enormous and also its market volume, which is over 115 billion US Dollars, is immense. In addition to these huge numbers, Gridcoin can currently only be associated with a very small fish. But not the market value should make Gridcoin attractive, but the idea behind the virtual currency and that is the promotion of scientific projects for the benefit of all humanity.

History of Bitcoin

Bitcoin, the oldest and best-known cryptocurrency, was released in 2009 as an open source code by Satoshi Nakamoto. Already in 2008, Satoshi Nakamoto had published a whitepaper describing Bitcoin as a standalone virtual currency, allowing transactions between people via a peer-to-peer network. This network should be decentralized and allow transactions without central institutions such as banks. In addition, the disclosure of his own personal information in transactions should be prevented. Transparency and security should characterize the new virtual currency.

To ensure the transparency and security of transactions with Bitcoin, the revolutionary blockchain technology was invented at the same time. Based on the blockchain technology, all transaction data could be stored anonymously, decentrally and tamper-proof in digital form for the first time. In addition, blockchain technology forms the basis for the development of cryptocurrencies such as Ethereum or Gridcoin.

History of Gridcoin

Gridcoin was released in 2013 by Rob Halförd as a new cryptocurrency. It was originally based on the Proof-of-Work algorithm, which should secure the blockchain network by mining coins, as in the case of Bitcoin. However, the Proof-of-Work algorithm was later replaced with the lower-energy proof-of-stake algorithm because of its high energy consumption. In combination with the Proof-of-Research algorithm, it is possible to make your own computing power available for scientific projects and to be rewarded with Gridcoins.

How Bitcoin and Gridcoin as cryptocurrency works?

Bitcoin itself is based on the Proof-of-Work algorithm. That means the Bitcoin network can be obtained by the high computing power of their users. The high computational power is needed to confirm transactions, generate a new block in the blockchain, and reward miners with coins as a result. The amount of reward depends on the user's effort to find the correct hash of the block. Miners compete to find the right hash to complete and reward transactions. However, to get a reward you need a lot of energy. In 2013, the Bitcoin network already consumed electricity worth 15 million dollars - daily. In 2014, its consumption is comparable to the electricity demand of Ireland.

The cryptocurrency Gridcoin, however, is significantly lower in energy consumption, as it is based on the Proof-of-Stake and the Proof-of-Research algorithm. Generating Gridcoins is based on the computing power provided and not by finding a correct hash value of a block in the blockchain. The computing power can be provided to various scientific projects such as cancer or AIDS research or the search for extraterrestrial life forms (SETI@home). All projects to be rewarded with Gridcoins are listed on the volunteer computing platform BOINC. BOINC enables unused computing power to be made available from a variety of computers over the Internet. Finally, it can be stated mining Gridcoins and the energy required for this is used for improving the quality of life of humanity.

What are the advantages of Gridcoin over Bitcoin?

Gridcoin, as a cryptocurrency of science, has some special advantages over Bitcoin, which is explained in more detail below.

A major advantage of Gridcoin over Bitcoin is the lower-energy effort for mining coins. This is due to the use of the Proof-of-Stake and the Proof-of-Research algorithm. The Proof-of-Research algorithm only allows Gridcoins to mine with its or GPU, by benefiting scientific projects. So, as in the case of Bitcoin, there is no need to buy expensive extra hardware (such as ASIC chip) designed for coin mining only. Moreover, this specialized extra hardware is associated with high energy consumption. Thus Gridcoin, as a rewarding cryptocurrency, enables the advantage to give your own computing power and with it the associated energy consumption to do something good for humanity.

In order to mine Gidcoins, it is generally not necessary to participate in groups, called mining pools. Providing computing power for scientific projects and being rewarded with Gridcoins can be done as an individual. However, in the case of Bitcoin, mining as an individual is not profitable due to high energy and high initial cost of expensive mining equipment. To mine Bitcoins, it is advisable to join mining pools to reduce your own energy costs for operating the mining hardware. However, the share of a luckily generated Bitcoin is minimal. This must be shared with the other participants in the mining pool.

Furthermore, Gridcoin has the advantage that transactions completed are confirmed in a much shorter time. Gridcoin generates a new block of transaction data in the blockchain almost every 90 seconds. In Bitcoin, in comparison, it is about every 10 minutes. This makes it slower for Bitcoin as a payment option to receive a payment confirmation for, for example, products or services purchased with Bitcoins. In addition, all receiving Gridcoins in transactions within 6 months are lossless. This includes payments and earned rewards.

Finally, all the special advantages of Gridcoin compared to Bitcoin explained above are listed below:

  • Mining Gridcoins is significantly more energy efficient than Bitcoins to mines
  • Participation in the BOINC network to help the advanced science by enabling computer power
  • Using CPU and GPU resources for Gridcoin mining (for example no special mining hardware like the ASIC chip required)
  • Individual mining of Gridcoins possible (no mining pools necessary)
  • Gridcoin transactions are quicker to confirm (all 90 seconds a new block is generated in the blockchain)
  • No loss of coins within 6 months

Main differences between the cryptocurrencies Bitcoin and Gridcoin

 

Bitcoin

Gridcoin

Released:

2009

2013

Market cap (June, 12, 2008):

Over 110 billion

Over 12 million

Blockchain:

Proof-of-Work

Proof-of-Stake and Proof-of-Research

Scalable:

Not at the moment

Yes

Mining:

ASIC miners

CPU and GPU

Block time:

Every 10 minutes

Every 90 seconds

Supply:

Over 17 million

Over 300 million

Actual Price (June,12,2018):

≈ 6800 US Dollar

≈ 0,03 US Dollar

More Information

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