The value of Bitcoin and Ethereum, two of the world’s most talked-about cryptocurrencies, has increased significantly over the last ten years. But, more importantly, it all started with these two cryptocurrency coins. The first is Bitcoin, with Ethereum following a few years later as the second.
Even though they both have the highest prices in the cryptocurrency market, many people are unsure which one is the best to invest in. There are many differences between these two currencies, and it is clear that things for Bitcoin and Ethereum have changed as of 2022.
But, which coin is the best to invest in? Let us continue reading this article to find out!
Which is the better investment, Bitcoin or Ethereum?
The Basics of Bitcoin:
Bitcoin lit a fire under the crypto world in January 2009. Bitcoin was created by Satoshi Nakamoto, and the promise it makes is that it, and other cryptocurrencies, are not backed up by any central authority. There are no physical Bitcoins that can be used in the same way that fiat currencies can. It’s all online and can only be accessed via the internet.
Bitcoin was not the first attempt at creating an online currency, but it was the most successful. Above all, without Bitcoin, there would be no other cryptocurrencies. Even if we did, it would be much later than Bitcoin, and we would have no idea whether they would have been successful or not.
Aside from that, Bitcoin is currently worth $21,000 due to a global market crash in the crypto market, but it reached an all-time high of $69,000 last year. Bitcoin’s market cap is currently $400 billion, but it may grow even larger in the future. However, keep in mind that Bitcoin has a limited supply of 21 million coins.
Furthermore, because Bitcoin is regarded as the “Godfather” of cryptocurrencies, it is most likely available for purchase on most crypto platforms. Nonetheless, there are platforms dedicated solely to the purchase of Bitcoin!
The Basics of Ethereum:
Ethereum was first introduced in July of 2015. It is widely regarded as the world’s best and most open-ended decentralized software platform. Ethereum paved the way for decentralized apps (dApps) and smart contracts that are free of fraud, downtime, and third-party interference. It has its own programming language and enables developers to create and run applications.
All potential Ethereum applications are powered by its native token, ETH. ETH has two main functions: it can run applications and it can be traded as a digital currency. In terms of payments, Ethereum is more widely used than Bitcoin.
Additionally, Ethereum’s market value is currently about $1,200 although it previously reached an all-time high of almost $5,000 last year. With a market supply of 121 million coins, Ethereum has a $143 billion market worth. In contrast to Bitcoin, Ethereum’s supply is not constrained, hence there is never a shortage.
Key differences between Bitcoin and Ethereum
Although it serves as a replacement for fiat currencies and permits peer-to-peer (P2P) transactions, Bitcoin is still not as commonly used as fiat money. You won’t have to pay exorbitant transaction fees while using Bitcoin, and it operates independently of any central authorities.
Like Bitcoin, Ethereum supports peer-to-peer transactions. However, it offers a platform that enables the creation of smart contracts and the distribution of software. Users of smart contracts can trade a variety of values, including money, property, and others.
You can use bitcoin mining to verify transactions as proof of work. For Ethereum, a situation like this exists. The goal of all miners is to constantly contribute a block to a blockchain.
Ethereum is attempting to alter its mining practices, and it intends to switch to several types of proof-of-stake transaction validation. Proof of stake refers to the practice of allowing the miner to approve or mine transactions within a block in accordance with the number of coins a particular user possesses. You will have more mining power the more coins you own.
In contrast, you will receive more than Six Bitcoins for each block that you upload to the blockchain while mining Bitcoin. The reward for Ethereum is three. Therefore, the payoff for Bitcoin in this instance is substantially bigger.
Let’s not overlook the fact that Ethereum will either lower electricity consumption by 99% this year or the following!
Bitcoin and Ethereum have different transaction fees. In the case of Bitcoin, if you are not the miner and decide not to pay a fee, your transaction will still be processed.
Ethereum, though, is a different story. To successfully complete your transaction, you must possess some ETH. Your ETH will be turned into a currency called “gas,” and this currency will enable the blockchain to record your transaction.
Ethereum wins this round when it comes to speed. For Ethereum, adding a block to the blockchain only takes 10–15 seconds. With Bitcoin, however, it can take up to 10 minutes!
Now that we’re looking at the two biggest cryptocurrencies, we can say with certainty that Bitcoin has the highest market share. It currently controls over half of the market share and is valued at about $20,000. Ethereum, on the other hand, has a value of roughly $1,000 and only commands 20% of the market.
Nevertheless, despite having a lower price, Ethereum is still the preferable choice. Ethereum may provide greater returns than Bitcoin after the market has stabilized and both currencies have recovered their value. Perhaps you’re wondering why? If you truly think about it, Ethereum has a lower value and a lower price point than Bitcoin, which gives it more room to grow than the latter.
In contrast, Bitcoin has the highest market value; yet, even if it achieves an all-time high of $70,000, your returns would only be increased by threefold. On the other hand, you will profit five or more times your investment if Ethereum reaches an all-time high of $5,000 or more.
Furthermore, there isn’t a “Safer” currency to invest in because their volatility rates are nearly comparable.