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Although Ethereum and Bitcoin were created with different intended purposes in mind, they are both an option worth considering from an investor’s point of view.
Even today when cryptocurrencies have reached the point of becoming mainstream, too many people jump straight into investing without doing any prior research. While everyone has a different taste when it comes to risk tolerance, not having the slightest clue about what you’re getting yourself into has never been a good idea. It’s much better to strive for making an informed decision instead, and you’re in the right place for that.
Ethereum in the News
If you’ve kept in the loop with the latest cryptocurrency news, you probably know Ethereum has announced adjustments to its gas pricing. In essence, the term “gas” refers to the cost of making a transaction within the blockchain. Since even the smallest transactions could incur $30 gas fees in the past, this has made it rather impractical for the purposes of day-to-day transactions. It goes without saying that the reduction of these fees has set off Ethereum on a bullish trajectory.
But before rushing to buy your first coin, keep the following BTC/ETH differences and similarities in mind:
Speed happens to be one of the major differentiating factors between the two. In this aspect, Ethereum outperforms Bitcoin by far and wide. With Bitcoin, a transaction takes minutes to settle, whereas Ethereum can handle the very same task within seconds.
In simplified terms, the Bitcoin blockchain is much like a database of wallets, with recorded amounts of currency each one holds. Ethereum is a much more sophisticated network in comparison, as one could even store application code inside. The core concept of its design is to be a platform for companies to build new software on. In crypto slang, many have started referring to its blockchain network as Bitcoin 2.0.
Ethereum and Bitcoin use separate protocols, so what happens to one does not translate to another, at least not on a technical level. With that being said, keep in mind that market fluctuations can cause both to swing either up or down in tight correlation. This, however, has more to do with the ongoing market trends than the architecture they were built on.
Both Bitcoin and Ethereum are as anonymous as their wielder makes them be, a concept also known as pseudonymity. As long as no traces are left behind that would link either cryptocurrency back to a real-world person, they are – at least in theory – anonymous. Think in terms of names, addresses, and even IP addresses; all of these can be used to track down the real-world owner. But of course, there are workarounds if one is familiar with them.
Non-fungible tokens (or NFTs for short) are one of the latest developments tied to Ethereum. Think of them as a digital representation of an artwork; whoever owns one, gets to prove they are the unique owner of the original. This is very relevant when deciding their collector’s value. In other words, you can copy a digital file like an mp3 or an ebook, but not an NFT.
Which One Is Better Investment?
That depends on the current state of the market. The gist of it is being able to predict how the ongoing trends will affect the behavior of the cryptocurrency you’re interested in buying. In general, both of these coins are considered to be “stablecoins”, because they’ve displayed traits of stability over a long period of time.
Still, you need to understand we’re talking about the crypto market here, so any form of stability is relative at best, at least compared to other investments you can make. To avoid putting your capital at the mercy of a single individual cryptocurrency, think in terms of diversification. At the end of the day, both of these coins can be a solid addition to your portfolio.
Both Bitcoin and Ethereum deserve your attention. Although they were created with different intended purposes in mind, they are both an option worth considering from an investor’s point of view.