Cryptocurrency, usually referred to as digital currency, was invented in the year 2009. This was done by Satoshi Nakamoto in response to the banking financial collapse of 2008. The main purpose behind introducing crypto was to facilitate the users in making day-to-day transactions. It was a way out for people who were previously stuck in the complicated traditional way of banking. The first of its kind crypto was Bitcoin, and it had the initial trading value of US $0.0008. However, prices observed a stark increase over the years. Recently, Tesla announced that it had invested $1.5 billion in Bitcoin. This ultimately led to an increase in the price of the cryptocurrency by 20%, as its new market value stood at $800 billion-plus.
Ethereum, on the other hand, was co-founded by Vitalik Buterin. The launch was started with an initial campaign in which Vitalik along with other founders sold Ethereum tokens to the participants. Through this, they raised around $18 million. The first release, however, was launched in 2015 and the platform has been growing ever since. What needs to be noted here is that what differentiates between the two cryptocurrencies in their blockchain networks, and their features. Therefore, it is understood that before investing in either one of them, one must be fully aware of what goes behind them.
Bitcoin Blockchain and its features
The characteristics and features of crypto blockchains tend to differentiate all the cryptocurrencies from one another. Some of the main features of the Bitcoin blockchain will be discussed to understand it in a better way.
To begin with, the Bitcoin blockchain is completely decentralized. What does this mean? Decentralization means that there is no central body that enjoys complete control over it. In contrast to the traditional currencies, where there is always a presence of a central authority that tends to manage the resources. This authority might be any organization or the government, etc. Thus, the decentralization of Bitcoin promises more privacy and security for individuals.
Among the things that Bitcoin swears by is keeping the anonymity of the user intact in whatever ways possible. Due to this, the user can never be traced which acts as a security measure for not just himself, but his assets also. No legal paper can help in identifying a person. This shows how Bitcoin blockchain promises the highest level of security to its users.
Bitcoin blockchain enables the users to enjoy faster transactions, which is immensely rare in the traditional banking system. One can send and receive transactions in a matter of few seconds, regardless of what part of the world they reside in. This in return increases the efficiency of the system. No extra or hidden charges for these transactions are no less than the cherry on the top
Ethereum Blockchain and its features
Ethereum blockchain technology is used to create applications whose use is not only restricted to digital currency. In present times, it has been subjected to an enormous amount of hype and is also considered by many to be the second most famous cryptocurrency after Bitcoin. This is mainly because of its commendable features, and its high success ratio in recent times.
First off, the Ethereum blockchain enables the functioning of not only smart contracts but also decentralized apps of all sorts. While doing this, this particular blockchain prevents fraud or a particular organization to have authority over it. What needs special emphasis here is that upon creating an app using Ethereum, one can almost immediately reach several other already existing protocols. This is termed as money legos. It ranks the second position of the most decentralized cryptocurrency after Bitcoin and like Bitcoin, it has no authority that has control over it.
Ethereum has the biggest developer community across the globe which gives it a huge advantage. Considering how blockchain technology is still somewhat new to the masses, Ethereum stands a huge chance of it becoming the first-ever project that successfully finds that market-fit product.
What’s behind these cryptocurrencies?
Bitcoin was specially made by keeping in mind the need to not have any middle parties involved. It can be used for literally anything; be it booking hotels, shopping for furniture, or buying Xbox for that matter. It allows merchandise to take place anonymously. Bitcoin is immensely helpful for the users as it cuts the unnecessary hassle that is involved in the traditional banking system.
Ethereum was introduced to cater to the areas where Bitcoin did not perform satisfactorily. Bitcoin falls short on complexity in functions. It can successfully send and receive transactions but when a smart contract comes in, Bitcoin does not support it. For this very purpose, Ethereum was created. Enormous levels of customization are offered by Ethereum which in turn helps programmers to come up with products like dApps, tokens, etc.
What is a better investment, Bitcoin or Ethereum?
This question is very often asked as to whether one should invest in Bitcoin or Ethereum. This solely depends on the needs of the user. However, if a more general approach is required then Bitcoin is referred to as a more stable investment in comparison to Ethereum. It has more accurate and precisely defined metrics to measure its value. Since Ethereum is more volatile and has a comparatively lower retail and institutional adoption, it is a little riskier to invest in. Therefore, to be on the safe side, Bitcoin can be considered a better option to invest in.
While both of the cryptocurrencies have made a dignified mark in the trading market, both have their perks attached to them. What must be the prime focus of the user is that they should always keep their needs and demands in mind before investing in any cryptocurrency, let alone Bitcoin and Ethereum. This is because every cryptocurrency contains its fair share of risks being associated with it. Therefore, take your time to choose and map out a trading plan for yourself to enjoy a more profitable trading career.