Now, with the growing interest in cryptocurrency, users ask more questions about investing in crypto. Two main cryptocurrencies attract the most attention: Bitcoin and Ethereum. Indeed, what is more profitable to invest in, and which coin has more perspectives? Let us have a look at both coins, their specific features, and the investment opportunities.
Bitcoin vs Ethereum: Similar Features and Differences
When we speak about similar features of these coins, well, there is one, probably: both BTC and ETH belong to the world of cryptocurrency.
Other than that, they are pretty different.
Bitcoin is a coin type. It was created as an alternative to fiat money and can be used as money. It is the most expensive coin ever. Any BTC to ETH converter will confirm it for you.
Ethereum is a network. Ether is a coin that powers the network. The Ethereum network can serve different purposes. The most known applications of the network are the possibility to create Smart Contracts and Dapps. Recently, one more innovation has been introduced by Ethereum – DeFi, or Decentralized Finances.
Influence on the Market
When you check any cryptocurrency converter and a live price chart, you will see that the price of Bitcoin is significantly higher than the price of Ethereum. Thus, many users believe that investing in Bitcoin is more reasonable than investing in Ethereum.
However, we would not be so categorical.
Bitcoin on itself has value as long as users are willing to buy it. The more users are ready to offer for one BTC, the higher the coin price grows. However, as soon as people aren’t willing to purchase the coin, it will collapse.
In the case of Ethereum, things are completely different. On itself, Ether isn’t meant to be money. It is a token that is used to power the Ethereum network and all that runs on it: smart contracts, Dapps. Thus, even if people aren’t willing to purchase Ethers, companies still might want to use the network for their purposes. For example, companies can use the Ethereum network to build smart contracts which allow them to make financial transactions safer.
Now, Ethereum is switching to Ethereum 2.0. The network is going to move from a proof-of-work protocol to a proof-of-stake protocol. It means that when the shift is completed, no new coins will be mined anymore. Mining is going to disappear, instead of it, stacking will be used for the validation of transactions.
The network will become highly scalable, the transaction fees will be reduced, and the transaction processing speed will boost. It all will increase the value of the coin. With the disappearance of mining, a so-called supply shock may take place. This factor might make Ether rally, too.
Of course, you shall understand that any investment in cryptocurrency is very risky. The cryptocurrency prices are changing every second, and it is very difficult to forecast anything. Thus, if you want to make the best investment, learn everything about the market, the coin, its potential, and make an informed decision.