Cryptocurrency is a digital asset that does not need to be circulated by a central monetary authority like a bank. These are built on blockchain technology, which is a decentralized and distributed ledger that maintains information about transactions between several users. One fundamental feature of blockchain technology? Not a single piece of data cannot be altered. In simple words, the transactions are irreversible which makes the entire system transparent. If you are really into trading, you may want to read Why Bitcoin Is Their No. 1 Choice to help you convince on what cryptocurrency you would choose.
While there are various cryptocurrencies like Bitcoin, Ethereum, Tether, XRP, Stellar and many more, the most popular ones are Bitcoin and Ethereum. As these two are being adopted globally, investors are having a hard time figuring out which one suits them best. It is important to study both these cryptocurrencies before coming to any conclusion and hence we have designed this guide solely for this purpose. However, we will be only stating the information and will leave the decision to you.
If you seem to be confused between choosing any of these popular cryptocurrencies, this informative article has got you covered. To help you clear all your doubts and concerns, we have highlighted some informative points which are covered below. Read on to know more in detail!
Table of Contents
Overview of Bitcoins
Bitcoins showed up in the financial investment scenario in 2008 with the hands of Satoshi Nakamoto. It was based on an idea that this online currency allowed peer-to-peer transactions between various users without involving any central authority such as a bank.
Bitcoin transactions are highly secure as they are recorded in a public ledger that is called a blockchain, which cannot be altered or changed. Leaving behind the market competitors, Bitcoins have undoubtedly managed to become the most successful version of cryptocurrencies.
For instance, in 2017 Bitcoin’s market value accounted for close to 87% of the total cryptocurrency market. That itself speaks volumes of how well the decentralized currency was accepted by people. Investors are buying and selling Bitcoins on platforms like the Bitcoin Era.
Currently, Bitcoin’s market is more than 870 billion dollars which is 41% of the entire crypto market. As per what the research reports state, there are a total of 21 million Bitcoins which were formed, out of which many are to come in the near future with the help of technological advancements.
Overview of Ethereum
Ethereum came into the picture in 2015. Being a decentralized form of cryptocurrency, Ethereum is another preferred choice after Bitcoins when it comes to talking about peer-to-peer payments. Ethereum runs on the highly-functional smart contracts which make it an ideal option to use in the heavy-demand sectors like finance, NFTs and gaming. These decentralized applications can be built on the network using Ethereum as it has smart contract capabilities.
Ethereum works on proof-of-work, or PoW protocol, to keep the network running, which causes higher energy consumption. This is the top most concern for Ethereum. However, Ethereum 2.O is a highly sustainable alternative that is going to be launched in 2022. As technology continues to evolve, Ethereum is most likely going to be more efficient and this is how Ethereum will soon win the hearts of crypto traders or investors.
Major differences Between Bitcoin and Ethereum
- The transactions on Ethereum network may contain executable code while transactions on Bitcoin network are data maintained to keep notes. Ethereum transactions take seconds to process while Bitcoin transactions take minutes to take place.
- In 2022, Ethereum is expected to switch to PoS protocol which would make Ethereum more scalable and secure.
- Bitcoin is compared to digital gold as it has a limited supply of 21 million Bitcoins and will most likely maintain its value. Alternatively, Ethereum usually is compared to digital silver.
- In 2019, Bitcoin accounted for 48% of the total cryptocurrency market, whereas Ethereum had a market share of 23.4%.
Conclusion
Cryptocurrency market is growing rapidly day by day and people have started investing in it in huge amounts. There are various choices in cryptocurrency for investors to choose from but the most popular ones are Bitcoin and Ethereum. Crypto investors generally hold both of them together considering their longer track record. Although both of them are distinct in their features, they both are expected to lead the crypto market in the foreseeable future.