Bitcoin and Ethereum are well-known names in the crypto space. As long-time rivals, there are often debates on them and each side maintains it is better — with good reasons.
These controversies have only increased as cryptocurrencies have grown more popular. However, the debates have made it more difficult for novice investors — and sometimes experienced ones — to know which to invest in. Hence, this article would serve as a guide to aid an investor to choose between them.
What is Bitcoin?
In January 2009, Satoshi Nakamoto released a whitepaper on blockchains that held his idea of a decentralized cash system. His whitepaper was not the first to propose blockchains but unlike others, it was followed by the launch of Bitcoin.
Bitcoin is a peer-to-peer digital currency that runs on a decentralized network. It serves as a means of exchange and storing value. It is the world’s first cryptocurrency and seeks to be an alternative to fiat currencies.
For more details about Bitcoin, check Bitcoin Coin Info.
What is Ethereum?
Vitalik Buterin founded Ethereum in 2015 as an improvement on Bitcoin. The cryptocurrency tackled the limitations of Bitcoin such as slow processing time. Ethereum also introduced the concept of dApps and allows smart contracts to be built on its blockchain.
DApps are decentralized applications that provide services and products without the need for a third party. The programs make use of Ethereum’s native token Ether for transactions.
For more details about Ethereum, check Ethereum Coin Info.
Bitcoin and Ethereum differences
Objectives
Bitcoin was created to be an alternative to fiat currencies. It is a decentralized and trustless system which gives it advantages over the traditional banking system. Thus, it is a better means of storage and storing value.
In comparison, Ethereum’s main purpose is to be a platform for trustless applications and smart contracts.
Technology
Both cryptocurrencies run on blockchains and are built using cryptography, but their core technology differs. The Ethereum network includes executable code in its transactions and uses ethash technology.
Bitcoin, on the other hand, utilizes its codes and data solely to keep track of transactions. It uses the SHA-256 algorithm.
Blocktime
A bitcoin transaction takes a minimum of 8 minutes to complete. Also, its network traffic is often congested. This makes it much slower than an Ethereum transaction that completes in mere seconds.
Which one is better – Bitcoin or Ethereum?
Bitcoin and Ethereum are both leading cryptocurrencies and have consistently maintained the top two positions since their launch. Each crypto also significantly influences the rise or fall in the price of the other. Hence, it is quite difficult to choose which to invest in.
Bitcoin has more prominence in the crypto sphere and a huge volume. It has a $0.87 trillion market cap, in contrast with Ethereum’s $454 billion, at the time of writing, which is more attractive to the investors. However, it might be riskier than Ethereum. Price slumps are sudden and you could lose all your assets.
To a software developer, Ethereum would be a better choice. DApps are easier to commercialize on the network and there is a buzzing community to provide help when needed.
It is also worthy to note that Ethereum is currently working on an update to be released in 2022. ETH2 would solve problems of network congestion and high transaction fees. It would suit an investor who prefers to be up-to-date with trends in technology.
Bitcoin would remain on its current operating system but has made updates to its technology such as The Lightning Network. The software makes transactions faster and cheaper on the blockchain.
Bottom Line
It is unlikely that either Bitcoin or Ethereum would be leaving the leading positions as cryptocurrencies anytime soon. Both have strengths that would keep them there for a long time.
Choosing between the two would depend on your preferences, investing methods, and how much risk you can tolerate. However, there is no reason why you cannot invest in both.
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