Also known as digital currencies, cryptocurrencies have gained considerable craze, especially during the pandemic. Even if you are not familiar with cryptocurrencies, you must have heard the terms Bitcoin and Ethereum. After all, they are the Pepsi and Coca-Cola of the crypto space.
Being the two biggest names in the market, Bitcoin and Ethereum are often pitted against each other by people looking to make their mark in the crypto world.
So, if you are one of them and wondering whether it would be a wise decision to invest in Ethereum or Bitcoin, don’t worry, this article aims to make things easier for you.
What is Ethereum and how does it work?
Founded by Gavin Wood and Vitalik Buterin in 2015, Ethereum tends to be one of the most popular cryptocurrencies out there. In fact, Ethereum touched its personal record and set a new record, crossing the USD 4,800 mark in November 2021.
Because Ethereum runs on a decentralized computer network called the blockchain, transactions can be easily managed and tracked. To understand things in a better way, blockchain can be thought of as a running receipt for all transactions ever made in the cryptocurrency world.
However, you should also know that these transactions are verified in the computer and data integrity is also maintained.
Advantages of Bitcoin
- Bitcoin is open source, which means anyone can buy or sell it.
- It is transparent, which means you can easily track transactions.
- Bitcoin transactions are cheap compared to PayPal, Mastercard and Visa.
- It is permissionless, which means it can be used freely and globally without borders or restrictions or without anyone getting permission.
Disadvantages of Bitcoin
- There is no third party or authority to resolve any issues that may arise.
- Bitcoin is volatile in nature, which means that not every investment you make in it will bring you profits.
- Although gaining significant popularity, Bitcoin is still accepted by a few providers and companies, so its use is quite limited.
Advantages of Ethereum
- Businesses that work with Ethereum and accept Ethereum payments can gain privacy as personal information will be encrypted.
- You can use it to buy online gift cards from various popular brands.
- Ethereum allows tokenization.
- Since Ethereum is open source, anyone can use it.
Disadvantages of Ethereum
- Ethereum is based on Solidity, which is a complex language and can be difficult to learn.
- The volatile nature of Ethereum makes it a risky investment.
What are the differences between Bitcoin and Ethereum?
Although Ethereum and Bitcoin follow the principles of distributed ledgers and cryptography, both differ in several ways. The comparison between the two has been an ongoing debate for a long time, but we aim to put things on the bright side by presenting all the major differences between Bitcoin and Ethereum.
So, let’s get started.
Creators and launch date
To begin with, the creators of the two cryptocurrencies are different. While Bitcoin was created by Satoshi Nakamoto in January 2009, Ethereum emerged in July 2015 and had many people involved in its creation. These people include Vitalik Buterin, Charles Hoskinson, Mihai Alisi, Geoffrey Wilke, Gavin Wood, Amir Chetrit and Anthony Di Lorio.
The supply level of Bitcoin and Ethereum turns out to be one of the key differences between the two.
When he created the coin, Satoshi Nakamoto set the Bitcoin supply at 21 million, and this limited amount is what helps it maintain value.
Ethereum, on the other hand, has no cap on the total amount, but tends to limit the annual supply.
The primary function for which Bitcoin was designed is to serve as an alternative to traditional fiat currencies. The main intention was to use it as a medium of exchange.
However, serving as a medium of exchange is not the main reason for the creation of Ethereum. In fact, it was created with the goal of providing a holistic platform and ecosystem filled with programs, contracts and applications that the user can use in many different ways.
Which is the better investment?
The big question that everyone has been waiting for is finally here and the answer to it will vary from person to person. If you are someone who wants a good peer-to-peer transaction system, then perhaps investing in Bitcoin and using it might be a wise decision.
On the contrary, if you want to build smart contracts and distributed applications, then Ethereum will be your currency.
However, some experts say that because Bitcoin has a limited supply and is the first of its kind, no other currency can surpass it. So choose wisely.
Bitcoin vs Ethereum has been a long and ongoing battle for many years now and we hope we have managed to make things a little easier for you. Although Bitcoin has a limited supply and therefore more value, Ethereum is said to have more improvements and advancements in the future. So keep up with the market and don’t invest before you know the current market trends.