Bitcoin vs Ethereum: Which Is the Better Investment?
Thanks to the ever-growing popularity of cryptocurrencies, it’s no surprise that everyone is looking to invest in them. However, the biggest dilemma for investors is where to invest their money between Bitcoin vs Ethereum.
Bitcoin was invented in 2009, and you could buy a Bitcoin for less than a cent. The price of Bitcoin has steadily risen despite the volatile nature of the currency over the years.
Ethereum was first traded in 2013, and its price was around $3. This new currency’s price rose steadily to over $1,400 in 2018. Thanks to the growth of these currencies, most investors are confused about where to invest their money; Bitcoin vs Ethereum.
This article will break down the differences between the two cryptocurrencies to help you make a more informed decision.
Bitcoin (BTC) is the king of cryptocurrencies. That’s because no other cryptocurrency has ever come close to it. As of April 22, 2021, one Bitcoin was worth $54,403.
Today, the total market value of all cryptocurrencies combined is $1.07 trillion. Bitcoin is the number one digital currency, while Ethereum comes second. Below are some key factors you should consider if you’re wondering what to buy between Bitcoin and Ethereum.
1. Bitcoin Gets the Highest Investor Attention
Most financial investors and celebrity entrepreneurs have warmed up to the idea of investing their money in Bitcoin. With companies adopting Bitcoin as a payment method for specific products online, it’s becoming a more acceptable payment method, and more people from the investing community are embracing it.
2. Relative Simplicity, Stability, and Acceptance Rate
Bitcoin is a decentralized currency with a well-predefined maximum supply. That means that the Federal Reserve or any other country’s central bank can’t regulate it. This is one of the most attractive qualities of Bitcoin.
Since 2009, the concept of Bitcoin has been thoroughly tested and authenticated. This testing has given rise to the market’s high opinion about Bitcoin. Experts have stated that Bitcoin is a digitally-scarce revolutionary currency that’s unique to anything else seen today.
3. It’s in Limited Supply
Bitcoin is like digital gold. That’s because there will never be more than 21 million Bitcoins in the market. Thanks to this known limit of cryptocurrencies, most investors prefer investing in these currencies.
With over 18.6 million Bitcoins already mined, the remaining Bitcoin in reserve is harder to mine. That’s because the creation rate of new Bitcoin reduces with time through a process called Bitcoin Halving.
This process ensures that Bitcoin creation halves after every 210,000 block transactions. The last Bitcoin halving happened in May 2020, and the next one will be around 2024.
Ethereum is the second most popular cryptocurrency in the market today. Before wondering whether you should invest in Bitcoin or Ethereum, there are essential factors you should consider. These include:
1. Ethereum’s Goal Is Different From Bitcoin
While both Bitcoin and Ethereum are the two biggest cryptocurrencies, they have significantly different goals and use cases. Ethereum operates as a decentralized network where developers can build applications. Today most cryptocurrency tokens are issued from the Ethereum network.
While both Bitcoin and Ethereum are valuable digital currencies, they are quite different. Ethereum is a type of infrastructure, and it’s still in its early days. However, experts have predicted that Ethereum has the potential to revolutionize the worlds of technology and finance.
As its popularity grows and more people continue to embrace it, Ethereum will change how security trading, mortgage transfer, and other financial and technological transactions work.
2. Offers More Development
There is more action surrounding the Ethereum platform because its utility’s only limit is the inventiveness of developers. The cryptocurrency that enables Ethereum transactions is called Ether. However, most people refer to it as Ethereum.
3. Ethereum Has Changed How Blocks of Cryptocurrency Are Created
Mining Bitcoin vs Ethereum is one of the most significant differences between the two cryptocurrencies. Instead of power being given to individuals with the highest computing power, individuals with the largest ownership stakes are assigned the advantage of creating a new token successfully.
The developers of Ethereum modernized it to a pristine new ETH in a process known as Proof of Stakes (PoS). Individuals using PoS put up the stake as collateral in ETH to qualify as validators on the network. Thanks to the limited number of ETH in circulation, the more you stake, the higher the value.
PoS is an efficient Ethereum mining method as it gets rid of expenses associated with mining new blocks such as hardware costs and electricity. This also means that fewer miners will be selling their ETH. So instead, they will be staking the ETH to increase their value further.
Buy Bitcoin vs Ethereum
The biggest question for investors today is, should I buy Ethereum or Bitcoin? Unfortunately, there is no easy answer, and your choice depends on your risk profile as an investor.
It’s expected that both entities do better as time goes. Because most people are embracing digitization, cryptocurrencies are also becoming an accepted method of payment for products online. However, most experts consider Bitcoin more stable as it’s the mainstream of the two online currencies.
However, more and more investors are leaning towards Ethereum in the last year. Ethereum is a high-risk investment. Thus, it has a potential for even higher rewards.
Whatever your choice is, it’s essential to remember that both currencies have grown past the phrase of proof of concept. If you haven’t hopped on this investor train, it’s vital to consider the growth curve of each currency before deciding to start purchasing ETH or BTC. Check out this article to learn more about buying Ethereum.
Bitcoin vs Ethereum: Which Is Better for You?
In the past few years, most investors are caught up in the dilemma of choosing between Bitcoin vs Ethereum. While both are digital currencies, they have different purposes.
Bitcoin’s primary purpose was to be an alternative monetary system without governmental regulation. On the other hand, Ethereum’s primary purpose is to monetize and facilitate a decentralized application platform and the operation of Ethereum smart contracts.
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