Bitcoin vs Ethereum: How do they compare?
If you’re brand new to the crypto world and wondering where to invest your money and you’re torn between Bitcoin and Ethereum, look no further. First, before determining where to invest, it’s important to understand what they are, the differences between the two, and the pros and cons of each.
What is Bitcoin?
Bitcoin (BTC) is best described as “digital gold” in that it is suitable for collection and exchange and used to buy things online without the involvement of third parties. It’s not the first time someone has executed this idea, but it’s the first time it’s been deemed successful. Originally launched in 2009 by an anonymous person or group under the alias ‘Satoshi Nakamoto’. It has since become the most popular cryptocurrency in the world and has encouraged an influx of cryptocurrencies since its launch.
What is Ethereum?
Ethereum (ETH) was originally created as a direct response to Bitcoin, amplifying and accentuating what the coin lacked. Ethereum is powered by the Ether token and runs as a decentralized blockchain network, which essentially means that it is almost impossible to hack into or change the information once it is released on a blockchain. Ethereum is often used for the functionality of NFTs, or Non-Fungible Tokens that are used to represent ownership of digital assets. This can vary from digital art, music, videos and much more.
The comparison between Bitcoin and Ethereum
The difference between the two basically comes down to the function of Bitcoin: The main purpose is to be able to exchange currency and buy goods. Bitcoin will be and is accepted as an alternative form of currency from, for example, the British pound (GBP). Various websites such as Shopify, Express VPN and Paypal in the US accept Bitcoin as a payment method. However, the same cannot be said for Ethereum, as its primary use is to create secured digital technology such as NFT art and others. Although Ethereum can be used to pay for services, it is more of a secondary use for the platform.
On the other hand, Bitcoin and Ethereum share some similarities, namely that they are the two most popular cryptocurrencies on the market at the moment. They both see a large volume of trade transactions on a daily basis, much more than any other currency. Both decentralized also means that external sources such as the Federal Reserve System or the government cannot keep track of transactions. So it is often found that those who use Bitcoin to create alternative means of payment can do so in confidence.
All in all, whether you invest in Bitcoin or Ethereum depends on what you intend to use them for. For general currency exchange purposes and online purchases, Bitcoin seems to be the best investment. Alternatively, for a deep dive into the world of NFTs and other digital assets, Ethereum may be the way to go.
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