Is the Bitcoin vs. Ethereum confusing you? Here’s a comprehension comparison to help you decide which cryptocurrency suits your investment needs.
Bitcoin and Ethereum are globally popular cryptocurrencies whose combined market capitalization exceeds $750 billion. These virtual currencies attract investors due to their potential to transform how humans exchange value, run businesses, and store funds. However, Bitcoin vs. Ethereum debate continues as veteran and novice investors want to know the best cryptocurrency to buy. This blog post compares Bitcoin and Ethereum to help you pick the most appropriate crypto asset depending on your investment needs.
Bitcoin vs. Ethereum- The Origin
Satoshi Nakamoto, an anonymous group or person, introduced Bitcoin in 2009. Bitcoin became the first successful cryptocurrency to use blockchain, a decentralized ledger, to record transactions and confirm their validity without an intermediary or central authority. Satoshi primarily intended to create a peer-to-peer payment system, allowing users to transfer or receive funds without censorship or intermediaries.
In July 2015, Vitalik Buterin, a renowned Russian-Canadian programmer who co-founded the Bitcoin Magazine, led a group of developers in launching Ethereum. Besides being a cryptocurrency, Ethereum is a platform for building and running decentralized applications (dApps) and smart contracts. It also runs on blockchain technology.
Decentralized applications run on the Ethereum network but do not have central control. Smart contracts are agreements that execute automatically based on any rule or logic. Ethereum’s primary purpose is to establish an international open-source platform for collaboration and innovation.
Bitcoin Uses
Most people use Bitcoin as an exchange medium and store of value. It is a censorship-resistant, global, and decentralized alternative to fiat money. Many people use platforms like voltixedge.org to exchange fiat cash for Bitcoin. Once they obtain the cryptocurrency, they store it in crypto wallets, waiting for its value to increase and sell it for profits.
For some people, Bitcoin is a haven asset, capable of hedging against currency devaluation, inflation, and geopolitical risks. They often compare it to gold since they share durability, portability, and scarcity characteristics.
Due to its ability to facilitate value exchange and storage, Bitcoin has secondary uses. For instance, some people use it for cross-border payments, remittances, tipping, donations, online shopping, and micropayments. Bitcoin has enhanced financial inclusion in places without proper access to conventional banking and those under oppressive political regimes.
Ethereum Uses
Ethereum’s primary use is providing a dApps and smart contracts platform. Its developers aimed to create a global programmable and decentralized platform running various applications and codes without censorship or intermediaries. This digital asset seeks to boost collaboration and innovations in multiple industries, including gaming, finance, social media, supply chain, identity, and healthcare.
Also, Ethereum serves a platform function, enabling people to use it to trade or issue digital tokens representing various rights and assets, including stablecoins, security tokens, utility tokens, and non-fungible tokens. Moreover, Ethereum can facilitate Decentralized Finance, which aims to establish transparent and open financial services accessible to everybody without intermediaries.
Bitcoin vs. Ethereum- Price Comparison
Price performance is among the visible and vital indicators of any cryptocurrency’s attractiveness and success as an asset. Bitcoin and Ethereum prices have experienced significant volatility or fluctuations since their inception. That’s because market sentiments, supply and demand, regulation uncertainty, innovation, and competition influence them significantly.
Nevertheless, both cryptocurrencies have experienced significant price increases since their introduction. For instance, Bitcoin’s price was less than $1 in 2010. However, it increased to more than $60,000 in 2021. Ethereum’s value was below $1 in 2015. Also, it grew to more than $4,000 in 2021.
Bitcoin has consistently maintained the highest capitalization and market dominance. Also, its adoption has increased significantly over the years as more merchants accept it. Corporations and institutional investors have also used it to hedge against inflation and store value.
On the other hand, Ethereum has surpassed other cryptocurrencies in development and network activity. Currently, Ethereum hosts over 2,000 dApps while processing more transactions than other blockchains.
Final Word
While the Bitcoin vs. Ethereum debate continues, both are revolutionary projects transforming the world of technology and finance. Each has strengths and weaknesses, opportunities and challenges, and pros and cons. Understanding how each digital asset works will help you make a more informed investment decision.