When entering the crypto world, many of you may ask yourself what is the difference between Ethereum and Bitcoin? Which one of them is a better investment? As you are comparing these two coins, you have neglected the fact that they are used for different projects and were created for different purposes. Is Ethereum better than Bitcoin? There is no direct answer to this question. But let us take a look at their differences to help you decide which one is worth investing in and form your own idea on the matter.
Bitcoin and Ethereum price
Despite so many differences between them, we’ll start with something they share in common. As cryptocurrency, both of them are used as a store of value and exchanged in transactions. It is written in the white paper that Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms and is operated by a decentralized authority, unlike government-issued currencies. There are no physical Bitcoins, only balances associated with public and private keys.
As a currency, we cannot avoid comparing Bitcoin and Ethereum price and their market cap. For now, the crypto market is still very much in the bear market and waiting for the Bull run. BTC has yet to recover and its price has now fallen down to $3,431. Meanwhile, Ethereum now is traded around $106 and went down by 21.14% since last month.
As for market capitalization, Bitcoin still has the largest cap of $61,003,570,236, while Ethereum has $11,281,972,519.
What gives Ethereum value?
While Bitcoin’s sole purpose is to be the virtual currency of the internet, Ethereum has a much bigger goal. What gives Ethereum value? First of all, it serves as a platform for anyone to release their coins or DAPPs. Ethereum can be used to store files on a cloud storage service or create smaller digital tokens used for ICOs, or Initial Coin Offerings.
Secondly, its value derives from Smart Contracts. Smart contracts help you exchange money, property, shares, or anything of value in a completely transparent way while avoiding the interferences and costs of a middleman. They can also function as multi-signature accounts so that funds are spent only when a certain percentage of people agree.
More importantly, Ethereum is the first cryptocurrency to be incorporated by major financial institutions like banks. so we can infer that within Ethereum lie huge potential and opportunity.
What gives Bitcoin value?
Bitcoin was Launched in 2009, the first cryptocurrency and the initiator of the blockchain technology.
It is a digital currency and aims to fix the problems in global finance. Bitcoin does not require a third party to complete a transaction.
Bitcoin’s value is speculative, which means that it is priced at what other people are willing to pay for it. At the same time, Bitcoin gains its value both from its use as a medium of exchange and as a store of value. Over these years, regulators and government bodies have gradually accepted the concept of digital currency. It has managed to take a place in the financial system despite the fact that it remains highly scrutinized and debated.
What’s more, what gives Bitcoin value is the blockchain it’s based on. The blockchain is a public ledger where all transaction records are kept in a given system. It is constantly growing as more transactions are happening. The blocks are added to the blockchain one after the other each time a transaction is confirmed. The blockchain thus stands as a tamper-proof record of all transactions on the network, accessible to all participants. The blockchain offers a chance to work at lower costs with greater regulatory compliance, reduced risk, and enhanced efficiency.
Understanding what gives Ethereum and Bitcoin value can partially answer the question we ask ourselves in this article. These two coins were created for different purposes, thus comparing them isn’t the best way to look at it. Instead, you should pay attention to where their value lies and how their prices might go both in the short and long term.
This concludes today’s article answering the question; Is Ethereum better than Bitcoin, the price of Ethereum and Bitcoin and what gives them value. We hope you learned a lot, enjoyed the read, and stay tuned for more great content.