Ethereum Vs. Bitcoin Investment: All You Need to know about the Big Two Crypto Giants

Ethereum Vs. Bitcoin investment is a debate that has been going on in the crypto-world ever since the growth of Ethereum. And that’s why today, we are looking at a full-on Ethereum Vs. Bitcoin comparison showcasing their strengths and weaknesses. BitGeeky.io, an online crypto wearables store says Bitcoin Hats & T-shirts outsell ETH merchandise almost 6 to 1, but that might soon be changing. The information below should help you make a wise decision in your next investment in crypto, but before we get started, let’s take a look at the definition of each coin,

  • Ethereum: Ethereum is an open-source, decentralized platform that houses other applications on its blockchain in simple terms. Ether is the crypto that runs on this platform.
  • Bitcoin: it’s a virtual currency that was invented back in 2009 by Satoshi Nakamoto.

Now that you are up to speed, we can head on to today’s topic- Ethereum Vs. Bitcoin: all you need to know about these two crypto giants.

Ethereum Vs. Bitcoin Guide- Basic Concepts

The idea behind the development of these two cryptocurrencies is different. Bitcoin was created to enable peer-to-peer transactions by eliminating the banks. More importantly, bitcoin’s decentralization nature ensured that the world governments couldn’t influence bitcoin’s price.

On the other hand, Ethereum still supports P2P connection and decentralization. But the main goal for the development of Ethereum is to provide a platform for creators to build applications and implement smart contracts. Several Altcoins have been built on top of the Ethereum ecosystem. Technically any token that uses ERC-20 protocols is based on Ethereum’s blockchain network. Therefore, Ethereum has helped to increase the cryptocurrencies available in the market.

The smart contract protocol grants users the opportunity to exchange almost anything that can be monetized. That’s one reason why this coin has been one of the latest hot topics in the crypto world, thanks to their NFT integration with smart contracts.

Ethereum Vs. Bitcoin Guide: Mining Process

The mining process in the cryptocurrency world is a term used to explain how new coins are generated. In bitcoin, the miners validate transactions carried out in the blockchain and get rewards in terms of bitcoins for their contribution. That process is known as proof of work. The same idea applies to Ethereum.

However, Ethereum recently announced that they would be launching ETH 2.0, including a different mining system. In ETH 2.0, the blockchain will incorporate a Proof of Stake algorithm. Proof of stake will help solve the scalability issue in Ethereum as well as increase the transaction speeds.

In the Proof of Stake, a miner will validate the transaction based on the investment they have. The more coins, the more power you will have in the mining process. Bitcoin mining is energy-consuming and also expensive. On the other hand, Ethereum mining, once they implement the new algorithm, will be energy efficient.

Additionally, Bitcoin mining is always halved after 210,000 blocks. Meaning, after a while, the reward you will get from mining bitcoins is reduced by half. But Ethereum with the new protocol will never be halved.

Ethereum Vs. Bitcoin 2021 Guide: Limited Supply

There will only be 21-million Bitcoins since there’s a limit to its supply. That’s why most investors consider Bitcoin as a version of digital gold. The best part about Bitcoin is that, unlike gold, there aren’t any discoveries of reserves. Currently, about 90% or more of bitcoin has already been mined. And due to Bitcoins halving process, the mining gets more challenging by the year.

On the other hand, there is no limit to the number of Ethereum that can be mined. Yes, you heard that right! The only limiting factor is that the company regulated the amount of Ethereum that can be mined yearly.

Ethereum Vs. Bitcoin: Transaction Speeds

The Bitcoin network can currently process 4.6-transactions per second which is considerably lower than Ethereum’s speed. Ethereum can process 10 to 15 transactions per second. That’s true with the current consensus of Ethereum. But with ETH 2.0, the transaction speeds are expected to be much higher than that. With a much higher rate, Ethereum will have more advantages over Bitcoin.

Ethereum Vs. Bitcoin: Smart Contracts

Another significant difference between Ethereum and bitcoin is the smart contracts feature. Ethereum offers smart contracts to its users to virtually purchase or sell anything that has monetary value. That’s what led to the beginning of NFTs (Non-Fungible Tokens.) NFTs are items sold in the virtual space with records of their purchases being stored in the blockchain.

That reduces any chances of counterfeit or fraud. NFTs come in different forms, including virtual art, estates, and so much more. Unfortunately, Bitcoin doesn’t have any smart contracts in its ecosystem. More importantly, Bitcoin’s sole purpose was to create a decentralized system, and it’s done that perfectly.

The crypto pioneered decentralization and blockchain technology. But I don’t think Nakamoto envisioned how far we’ve come from the basic concept of decentralization. All the same, Bitcoin’s primary objective of decentralization is slowly but surely revolutionizing how we value fiat currencies.

bitcoin vs ethereum

Is it too late to invest in Bitcoin and Ethereum?

We can all agree that both Ethereum and Bitcoin are far from where they started in terms of trading volumes and value. However, I still believe that both of these cryptos are worthwhile investment choices. That’s because the coins can go even higher. More importantly, ETH 2.0 is set to change the game for the blockchain. It could very well increase its mass adoption to the point of bypassing its long-time adversary, Bitcoin. But who knows! All we can do is speculate what the future of these two cryptos can be.

Take Away Message

Well, there you have it! You can now brand yourself as a crypto-connoisseur of Bitcoin and Ethereum. This information should effectively help you make the right decision when it comes to investing in cryptocurrencies. However, ensure you do your research before making any trading decision.

All the same, both Ethereum and Bitcoin hodlers have had a profitable year, with both coins witnessing solid bullish trends. And the best part is that these coins show promise of going even higher than what is expected. You should watch out for these two crypto-giants.