The Ego and Self Esteem are two concepts related to one another but differ like siblings. Ego often precedes one's self esteem, but once knowledge is attained, then esteem is built.
The Ego is a concept often used, but rarely understood. Sigmund Freud defined it as one of the 3 components to the human psyche. It is concerned with balancing desire with practicality (between the id and superego). It's been said that it is a measure of how a person thinks or feels about themselves at any given time including how they are perceived by others.
Self Esteem deals with the self respect derived from personal accomplishment and the corresponding knowledge or confidence in oneself.
When one has not attempted a feat, but feels that they are capable of such a task, it is their ego that tells them they can "do it". When they struggle or fail, their character is tested and how they react to the reality of frustration helps build maturity. Their ability to shrug off disappointment and persist in moving forward is the measure of that persons character.
It is also important to note that ego derives fulfillment from external sources such as fashion, wealth, societal status, and addiction to material; whereas self esteem is fulfilled from internal sources such as achieving self knowledge, personal accomplishment, and faith in one's honest ability (true confidence).
Ego tends to be ephemeral and temporary (like renting). People who define themselves by these things find themselves lost when such ego devices are (inevitably) taken away such as wealth, relationships, business, or physical possession (including your body).
Self esteem seems to be enduring and much more lasting (like owning). People who possess self esteem retain their value when material or superficial relationships are severed.
When given a choice between the two, I would much rather elect the option that offers the most mileage. My happiness will ultimately be greater in the long run and independent of external stimulus.
I have heard it said, "Fake it till you make it" which I believe refers to the mercurial state of one's character. Few people are born 'winners', it takes practice at building any skill; therefore, before one can be great at something, they first have to believe that they can achieve greatness. Many times, in order to convince themselves, people must first be convincing to others. Eventually the individual will forget, forgive, or forgo their past selves, and embrace their new persona.
A few years back, I decided to grow out my hair. I had always known short hair and spent a great deal of time and money to fit my idea of style and fashion. When I first started the growth phase, I had no expectations since it was completely new. I noticed that people looked at me differently when I didn't conform to societal standards. After a year, I stopped caring about styling my looks and just 'went with the flow'; women started to notice. I learned many things from the process including the fact that confidence comes from within. After a few years of possessing long hair, I decided to shave my locks completely off. Almost drastically, I felt as if my powers of confidence had left me. It was traumatic adjusting to the new reflection in the mirror. After a couple days, I realized that I was the same Man, just without the extravagant mane of hair. My confidence returned, and once again... Women noticed. It's a cool experiment to try out (if you can afford it). This tests as well as develops character and goes with the philosophy of knowing thyself.
Greatness is a mindset that begins with the belief, "I think therefore I am."