Bitcoin and Ethereum are undoubtedly two major cryptocurrencies that gain more influence on the market. At first blush, they seem similar, but in fact, they are fundamentally different.
Bitcoin is the first and still the most valuable cryptocurrency that was launched to replace centralized financial systems and hand over control of money to individuals. This innovative approach to managing funds has found a broad response among the public and triggered demand for more purpose-driven crypto projects.
Ethereum has emerged as an alternative to Bitcoin, but it represents a whole new concept of cryptocurrency and provides users with a lot of unique and promising features. First and foremost, Ethereum markets itself not as yet another cryptocurrency for fast cross-border transactions but as a decentralized platform or framework for developing apps.
As you might have already concluded, the two coins attract investors for different reasons. Yet the question remains – is it better to buy Ethereum? Or Bitcoin? Let’s look at the price stats, unique features, and find out which coin deserves your money.
What do we actually know about Bitcoin?
Decentralization. The nature of Bitcoin is decentralized, which means that every participant is as involved in the process as any other and every protocol change needs to be agreed by the whole network. The Bitcoin network consists of millions of computers and is maintained by so-called ‘miners’. Miners are in charge of validating transactions and releasing new Bitcoins into circulation.
Scarcity. As the number of coins is limited (21 million to be precise) and their movements are recorded in a transparent ledger, the Bitcoin system is protected from inflation and counterfeiting. As of November 19, there are 17 million Bitcoins mined, and this number is increasing day by day. Many experts have already made their ‘bets’ on how the market will respond to a short supply of the coins eventually, forecasting the price of Bitcoin to reach unbelievable heights. Whether it is bound to happen remains to be seen, but this could well be a game-changing moment for crypto holders to speculate on Bitcoin’s price.
Adoption. Bitcoin is the most widely accepted and established cryptocurrency to date. Numerous websites and even land-based stores have already jumped aboard the cryptocurrency train offering customers to put their Bitcoins to use. Even the industry giants like Microsoft, Virgin Galactic, and Namecheap could not afford to stand back. Although a lot of improvements to the protocol are needed, Bitcoin is still strongly supported and adopted for a range of purposes. You can use it to pay for goods or services, hold it as an investment asset for future gains, or trade it for profit if you are skilled enough.
However, if you look under the hood, the things are not so rosy for Bitcoin as they might seem at first.
Lack of protocol upgrades. Bitcoin is truly an innovative form of money and a groundbreaking network for cross-border transactions… But only when compared to fiat systems. When it comes to competing with altcoins, Bitcoin has still less to offer in terms of transaction speed and fees. It takes around 10 minutes for miners to validate one block and $0.40 for you to pay for a transaction. Not so bad, is it? But if you take Litecoin, for instance, you will be surprised to find out that the average block time for it is only 2 minutes, and the transaction fee is $0.040. Now it makes a big difference.
Lack of regulation. Bitcoin is a totally new concept for governments as it does not conform to the rules of the traditional financial market. Hence, the authorities are sweating guts out to develop the regulatory framework and tighten their grip over the crypto economy. Once they succeed, Bitcoin can go two ways – either towards prosperity or destruction. Well, only time will tell.
What does Ethereum have up its sleeve?
Platform for decentralized apps. Ethereum is mostly known not for its native token, Ether, but for the ecosystem it offers to help developers create and execute industry-specific applications. These applications are powered by smart contracts and generally referred to as DApps. Launching a decentralized project on the Ethereum platform is easy and straightforward if you are a passionate developer who aims to transform the digital world. As of today, Ethereum can boast of over 2,000 DApps that fall under the categories of financial, semi-financial, and governance applications. Among the most popular are IDEX (a decentralized smart contract exchange) and CryptoKitties (a decentralized game for breeding digital kittens and earning ETH).
A wide range of use cases. As mentioned above, Ethereum is a powerful technology that can be used across various industry sectors. With this in mind, the team behind Ethereum has created an organization that is contributing to the growth of technology adoption among enterprises. The purpose of the Enterprise Ethereum Alliance is to develop blockchain solutions and industry standards for businesses to interoperate with each other in a more efficient way. The organization includes more than 500 enterprises with Accenture, Santander, and Deloitte topping the list. As more projects from the EEA will emerge, the status of Ethereum as the most real-world adapted platform will be maintained.
The ill fame of ICOs. Being one of the most functional blockchains, Ethereum has become a safe haven for cryptocurrency startups. As its protocol allows developers to issue new tokens and easily distribute them across the Ethereum blockchain, a new model of crowdfunding has emerged – ICO (initial coin offering). Generally, when performing an ICO, startups sell their newly-created tokens to investors and contributors for ETH. Given the fact that ICOs are unregulated, this form of raising money attracts a lot of scammers. In 2017 alone, 80% of ICOs turned out to be fake. No wonder it detracts a great deal from Ethereum’s reputation.
Bugs in smart contracts. It is common knowledge that Ethereum is the father of smart contracts. It was first to introduce the concept of self-executing programs that facilitate peer-to-peer transactions and make them more credible. However, no matter how great and breakthrough this innovation is, smart contracts do contain bugs that may sometimes have a devastating effect. This vulnerability has already led to thousands of dollars lost.
Which one to choose
Both Ethereum and Bitcoin have an army of admirers and opponents. If you want to buy cryptocurrency, consider what you can use it for. Bitcoin is a good choice because it’s the most valuable currency on the market that is already widely accepted for payments.
Anyway, to make a smart investment, you should carefully analyze the market trends and research on the opinions of crypto authorities. Perhaps, it would be better to buy Bitcoin since its the best cryptocurrency we have now .
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