Bitcoin and Ethereum have a lot of similarities. Both are cryptocurrencies that come in “coin” form, giving them a specific denomination that can be represented as a dollar or euro value. Also, both rely on the blockchain for secure transactions. These similarities can be so identical that those who are new to using digital currencies might feel that they are not actually making a choice but picking from two equals.
That’s not the case, though. In fact, there are some big differences between the two. If you’re thinking of using one of these, it’s important that you know what those differences are so that you can make the right choice in your selection.
Here, let’s look at some of the big differences so that you are more informed and can make a smarter choice. Knowing the strengths and weaknesses of each will ensure that you select the right one for your purposes.
Let’s talk about usefulness and utility first. Right now, Bitcoin is the clear leader here. It has been around the longest and more online vendors accept this as a form of payment than any other cryptocurrency. Ethereum is gaining in popularity, especially with American businesses. However, Bitcoin still has the edge here by a wide margin. At the rate that Ethereum is expanding, it’s just a matter of time before this changes, but that time is still probably a few years off in the future.
Looking at buying cryptocurrency, you can access yours in many different ways. Right now, the most popular method of accessing either Bitcoin or Ethereum is using a broker, such as Coinbase. You can also mine for either. Bitcoin is very difficult to mine without a specific type of computer because the blockchain is larger, but Ether will be at this point in the near future, too.
Both Ethereum and Bitcoin have a high degree of reliability. But much of this is dependent on the user. You can only safely use a cryptocurrency if you are well educated when it comes to storing and using your money. You need to have the right type of digital wallet for your purposes. For example, you can keep either on your computer, your smart device or on an external drive not connected to the web. Depending on your purposes, any of these are fine. Ethereum has borrowed a lot from Bitcoin, but both have made huge improvements in how the blockchain is processed, how your digital cash can be kept secure, and how to keep transactions can be made safer. Be sure that you educate yourself on security and reliability and be sure that you are doing the right things to keep yourself and your money safe.
Ethereum and Bitcoin both use the blockchain for ensuring that counterfeit currency does not exist, but the Ether has an advantage over Bitcoin here. Ethereum uses something called the Smart Contract in their blockchain technology. This allows you to program transactions. So, if you want to make an automatic payment to a vendor every month, you can do that with Ether, but each payment would need to be made manually with Bitcoin. Whether this is for you or not depends on your purposes. Sure, automatic payments create convenience, but that doesn’t necessarily mean that it’s the best move. Smart Contracts also allow you to purchase other items, such as stocks and property. This gives the Ether a lot of real-world application that the Bitcoin does not currently have.
Bitcoin also made a lot of mistakes when it came to security several years ago. We’ve all heard the horror stories about exchanges losing people’s money or of hackers gaining access to millions of dollars worth of Bitcoin. These mistakes have largely been learning experiences, both for Bitcoin and every other digital currency out there. Hopefully, mistakes will not be repeated. That does not mean that criminals will not find new and creative methods to illegally gain access to your money, though. Be sure to keep up with the latest trends in cybersecurity.
Room for Growth
Make no mistake here: both Bitcoin and Ethereum have experienced a lot of volatility. Both have seen huge increases and decreases. The Bitcoin has seen a lot more stability than it saw in the past, however. But with the huge increases that the digital currency has seen in the last few years, many traders and investors are concerned that a Bitcoin bubble is in the works. If this is the case, then Bitcoin could drop in value. This is hard to confirm one way or another, mostly because Bitcoin is only valuable if people use it. It seems to have a lot of long-term value, but it’s hard to say where it will be in a few days or weeks.
Ethereum is a lot younger than Bitcoin, and it’s worth pointing out that Ethereum is far more stable than Bitcoin was at this point in its life. Market experts have pointed out that the Ether has a lot of things going for it that Bitcoin does not, and some have even gone on to say that Ethereum will soon surpass Bitcoin in value. It’s hard to say if this is true, but there are some strong arguments moving in both directions. Both have a lot of room for growth, but based on how quickly the Ether has adapted to this developing market, it seems like this currency has a lot of extra room for growth that Bitcoin does not.
Ethereum and Bitcoin both have distinct advantages and disadvantages. Ethereum looks like it will soon be the cryptocurrency to use, but this is not yet the case. Also, both have room for growth despite this. It’s hard to say which one is best for you as an individual, so be sure to look over these distinctions, take a look at your own purposes, and then make an educated decision. There are also a lot of other resources out there that will help you in forming this decision.