Also known as digital currencies, cryptocurrencies gained significant rage, especially during the pandemic time. Even if you’re not aware of cryptocurrencies, you must have heard the terms Bitcoin and Ethereum. They are, after all, the Pepsi and Coca-cola of the crypto space.
Being the two biggest names in the market, Bitcoin and Ethereum are often put head-to-head by people who are looking to make their mark in the crypto world.
So, if you’re one of them too, and you’re confused about whether it would be a wise decision to invest in Ethereum or Bitcoin, fret not, this article aims to make things easier for you.
What Is Ethereum and How Does It Work?
Founded by Gavin Wood and Vitalik Buterin in the year 2015, Ethereum tends to be one of the most popular cryptocurrencies out there. As a matter of fact, Ethereum touched its personal best and set a new record crossing the 4800 USD mark in November 2021.
Since Ethereum operates on a decentralized computer network called blockchain, the transactions can be easily managed and tracked. To understand things in a better way, blockchain can be thought of as a running receipt of all transactions ever taken place in the world of cryptocurrency.
However, you should also know that these transactions are verified in the computer, and the integrity of the data is also maintained.
Advantages of Bitcoin
- Bitcoin happens to be open source which means anyone can purchase or sell it.
- It is transparent, which means that you can track transactions easily.
- Bitcoin transactions are low-cost as compared to PayPal, Mastercard, and Visa.
- It is permissionless, which means it can be used freely and globally with no borders or limits or nobody to get permission from.
Disadvantages of Bitcoin
- No third-party or authority exists to resolve any issues that may arise.
- Bitcoin happens to be volatile in nature, which means that not every investment you make in it will harvest profits for you.
- Despite gaining significant popularity, Bitcoin is still accepted by a few vendors and companies, so its use is quite limited.
Advantages of Ethereum
- Businesses that operate on Ethereum and accept Ethereum payments can obtain privacy as private information will be encrypted.
- You can use it to purchase online gift cards from various popular brands.
- Ethereum allows tokenization.
- Since Ethereum happens to be open-source, anyone can use it.
Disadvantages of Ethereum
- Ethereum is based on Solidity, which is a complicated language and may be hard to learn.
- The volatile nature of Ethereum makes it a risky investment.
What Are The Differences Between Bitcoin and Ethereum?
Even though Ethereum and Bitcoin follow the principles of distributed ledgers and cryptography, both of these differ in several ways. The comparison between both has been an ongoing debate for a long time now, but we aim to put things on the clear side by presenting all the major differences between Bitcoin and Ethereum.
So, let’s get started.
Creators and Launch Date
To start off, the creators of both cryptocurrencies are different. While Bitcoin was created by Satoshi Nakamoto in January 2009, Ethereum came into existence in July 2015, and there were many people involved in its creation. These people include Vitalik Buterin, Charles Hoskinson, Mihai Alisie, Jeffery Wilcke, Gavin Wood, Amir Chetrit, and Anthony Di Lorio.
The level of supply of Bitcoin and Ethereum happens to be one of the key differences between the two.
When he created the coin, Satoshi Nakamoto set the Bitcoins supply to 21 million, and this finite amount is what helps it hold value.
On the flip side, Ethereum doesn’t have any limits on the total amount, but it tends to cap the yearly supply.
The primary function for which Bitcoin was designed is to serve as an alternative to traditional fiat currencies. The main intention was for it to be used as a medium of exchange.
However, serving as a medium of exchange is not the primary cause behind the creation of Ethereum. It is, in fact, created with the purpose of providing a holistic platform and ecosystem filled with programs, contracts, and apps that the user can utilize in many different ways.
Which Is The Better Investment?
The big question that everyone has been looking forward to is finally here, and the answer to this would vary from person to person. If you’re someone who wants a good peer-to-peer transaction system, then perhaps investing in Bitcoin and using it might be a wise decision.
On the contrary, if you wish to create smart contracts and distributed applications, then Ethereum would be your go-to currency.
Nevertheless, some experts say that since Bitcoin has a limited supply and is the first of its kind, no other currency can outmatch it. So, choose wisely.
Bitcoin vs Ethereum has been a long and ongoing battle for many years now, and we hope we were able to make things a bit easier for you. Even though Bitcoin has a limited supply and hence, more value, Ethereum is said to have more improvements and advancements in the future. Therefore, keep up with the market and don’t invest before knowing the current market trends.