Investors guide to major differences between Ethereum and Bitcoin
Jan 28, 2018 Posted / 3726 Views
If you are one of those who has always been confused whether to invest in Bitcoin or Ethereum, then you have entered the right space. There are some obvious differences in the leading cryptocurrencies that set them apart from each other.
The most apparent difference is the age. Bitcoin was the first to enter the global cryptocurrency circuit and can be labelled as the pioneer invention. The currency came about in 2009 while ethereum only took birth in 2015 as a probable alternative to Bitcoin. However, Ethereum came about with some unique features that gave it an advantage over its predecessor. In order to divulge on this, let us share two aspects of the cryptocurrency:
As a store of value
As a transactional medium
Bitcoin has been recognized as a store of value and the most precious digital coin in the world by a remarkable margin. It’s very popular in comparison to all its cousins that makes it easier to buy, store, and sell.
However, Ethereum and its coin, Ether, are not far behind and is second on the list. Ethereum is a young currency which has proven its worth in very less time. The exact monetary worth of a single “ETH” is less than five percent of bitcoin, which means that owning a few Ether is no way near as pleasant as owning a few bitcoin.
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Nonetheless, there are some cores to the bitcoin, which includes its built-in scarcity. There is a hard limit on the ultimate number of bitcoins, with diminishing returns for miners as they approach that mythical 21 million mark. One day no more bitcoins will be created, and even if lost no more will be made. Thanks to supply and demand, that means bitcoin should, in the paper, might grow in value, but this remains until no more coin appears.
Ethereum, on the other hand, has opted for a more steady flow and its supply will be released timely, so that the currency can grow constantly. It can be said that cryptocurrencies are seemingly volatile ventures and if bitcoin will remain the king, nobody can promise for that.
Yes, no doubt Bitcoin is a better store of value at present time, however, ether is a more preferred method for exchanging wealth amongst people and entities. If you will look at statistics for the number of transactions per day that has taken place in 2017, you will find that Ethereum has overpowered bitcoin in this matter, with more than twofold the number of transactions taking place with Ether on a daily basis.
The reason behind this is that Ethereum can be utilized as a platform for other cryptocurrencies, and also because Ether transactions tend to be approved expeditiously by the blockchain. Ethereum as such is developed as a more efficient technology than bitcoin, as it is far more optimized cryptocurrency.
Recently, there had been growing concerns in the Bitcoin community that the cost of transactions is quite high. This gives Ethereum another advantage over bitcoin as its fees tend to be far lower. There is always the possibility that Ethereum will also face higher fees as it has the same scalability issues as with other cryptocurrencies, however, it seems that it will not increase in any near future.
Both Bitcoin and Ethereum have their own set of advantages and disadvantages. It depends on your financial situation in which you want to contribute in and which is right for you.
If you are one of those who need great trust and assurance, you may want to buy into the most established cryptocurrency with the high developer support- bitcoin. Although, it’s the most valuable out there and its transaction fees are high. So, invest only if you want a big return on what you’re putting into it, and plus you’ll need to be patient. Bitcoin has its own set of meteoric rises and historic crashes devastating the big money investments. But as the bitcoin enthusiast would often say, just “hold.”
However, if you are premediating to make more frequent transactions, Ethereum is much more manageable. With less of a scaling problem, its blockchain is far more open and you’ll see your currency confirmed far faster. You’ll be charged much less for the privilege too. It’s not perfect, but it’s far better than bitcoin in that respect.
Applancer is an open platform for discussion on all things like Blockchain , Cryptocurrency and Ico news updates. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of Applancer .
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