October 31, 2020
Should I buy ether or bitcoin ?
Should I buy ether or bitcoin ? This is a very common question nowadays. Bitcoin and Ethereum occupy the top two places in the capitalization rankings of cryptocurrencies. If you’re looking to invest in crypto, you’ve probably asked yourself the question of buying Bitcoin or Ethereum. But should we see these two cryptos as only competitors, just like what Coca Cola and Pepsi would be? Are Ethereum and Bitcoin really comparable? In this article, we answer this question while providing you with the basic information you need to know about Bitcoin and Ethereum.
Should I buy ether or bitcoin : General presentation
BitcoinBitcoin was created in 2009 by Satoshi Nakamoto. Although the concept of cryptocurrency is older, Bitcoin (BTC) turns out to be the first crypto to appear in the spotlight. Since its inception, Bitcoin has been at the forefront of capitalization, by far… Thus, at the end of July 2020, Bitcoin’s market capitalization was about US$200 billion. At the time of writing, the price of Bitcoin is around $11,000. Also read : What Bitcoin will be worth in 2021 ?
EthereumTheEthereum was officially launched in 2015 by Vitalik Buterin. This is the second crypto (after Bitcoin) with US$35 billion in market capitalization. The year 2020 marks an important milestone for the Ethereum as it is expected to host the Ethereum 2.0 in the near future. At the time of writing, the price of Bitcoin is around $370.
Should I buy ether or bitcoin : The similarities between both cryptosBitcoin and Ethereum share the characteristics inherent in most cryptocurrencies. First, it is a decentralized system. To function, they do not need a central authority or a third-party agency. In addition, they operate on the basis of a blockchain that consolidates, orders and protects transactions. In addition, although different, the two blockchains are public and belong to the nodes of the network.
The creation processAt the moment, both cryptos operate with a “Proof-Of-Work” process. This “Work Proof” is used to validate a block of transactions. In practical terms, it consists of a chain of random characters that must be found as quickly as possible by the miners in order to generate the right hash of the block in question. Although the cryptographic hash function differs between the two (SHA-256 for Bitcoin, Keccak-256 for Ethereum), it is a 256-bit hash and the principle of mining the two cryptos remains similar. However, this similarity may soon no longer be on the agenda. Indeed, Ethereum 2.0 is characterized mainly by the adoption of another process, the “Proof-Of-Stake“. Discovered in 2012, this process is more virtuous (less energy-intensive), fast and therefore more adapted to the future challenges posed by DeFi. Although Bitcoin is still more easily accessible, both cryptos are available on most exchange platforms. Since these are the two most well-known cryptos, there are different ways to buy them. Peer-to-peer exchange is not the only way to acquire it. It is also possible to buy these cryptos with cash from ATMs, cash warrants or prepaid cards.
Should I buy ether or bitcoin : The differences
Technical differencesIn addition to obvious macroscopic differences such as capitalization and price, there are technical differences. Let’s take a few examples.
The remuneration of minorsThe Bitcoin network predicts the circulation of 21 million tokens in total. The last token is scheduled to be mined in 2140. Currently it is estimated that about 88% of the chips have already been mined. To manage the BTC broadcast, the network mainly uses Halving. Every 210,000 blocks, a Halving takes place, resulting in a halving of miners’ pay. Ethereum is very different from that point of view. There is no token limit in circulation. To keep control of the token issue, the miners’ reward is much less attractive than on the Bitcoin network. Currently it is around 2 ETH.
Transaction feesTransaction fees for minors are also different. For Bitcoin, the amount of fees determines how quickly the miners will process the transaction. The higher the costs, the more advantageous it is for minors to take care of your transaction and the faster it will be processed. Conversely, if the fees are not sufficiently incentive, chances are you will have to wait a few blocks before your transaction is integrated. Ethereum, on the other hand, operates on the basis of a “gas” system. Each transaction represents a calculation cost that is calculated in gas. By analogy, you could say that the gas is similar to the gasoline you put in your vehicle. This is the way to run the Ethereum network (or your car). The number of gases your operation requires defines the costs you will have to pay to the miners.
The size of the blocksA final big technical difference between Bitcoin and Ethereum is related to the size of the blocks. On the Bitcoin blockchain, the block size is limited to 1 MB. For scalability issues, the Bitcoin community has scrambled to increase the limit of these blocks. This difference in view led to a “Fork” with the creation of Bitcoin Cash. For Ethereum, the size of the blocks is determined by a maximum allowable amount of gas. Thus, a block cannot accept more than 6.7 million gases.
A different goalThe fundamental difference between Bitcoin and Ethereum is not necessarily technical. In reality, the purposes of these two cryptos is different . Bitcoin is a pure cryptocurrency. We use BTC tokens to complete a transaction. Bitcoin is a direct and viable alternative to fiat currency (especially cash) and the traditional banking system. Strictly speaking, A ether is the name of the electronic money supported by the Ethereum process. Like Bitcoin, The Aether can be used to make peer-to-peer transactions and has a currency price. But Ethereum is more than just an electronic currency. The Ethereum, as conceived and intended by its creator Vitalik Buterin, is much broader in its design. Instead of being the main objective, the Ether is rather a way to make the Ethereum platform work. They created the Ethereum process to develop decentralized applications (DApp) based on smart contracts. While the Bitcoin blockchain is only used for transactional purposes, the Ethereum blockchain hosts mostly applications. Seduced by the characteristics of the blockchain, more and more actors use the Ethereum for some of their services. This is the case in the fields of finance, art, accommodation, banking, industry or computer storage. In addition to serving as currency, the Aether is also present to ensure the operation of the blockchain applications. According to ethereum, this dual function is a factor that will allow the Ether to become a must in the future. The Ethereum 2.0 offers a more suited blockchain to the challenges of DeFi. With the adoption of the Proof-Of-Stake, scalability may increase to several thousand transactions per second (compared to one in 16 seconds currently)!
Are Bitcoin and Ethereum really comparable?The success of The Ether has led many people to consider Ethereum as a mere electronic currency. Ether was seen as a direct competitor to Bitcoin. If this is not wrong, originally, we must not forget that the Aether was rather thought as a complement to Bitcoin. In fact, it is possible to store bitcoins on the Ethereum blockchain. Indeed, as mentioned above, The primary purpose of Ethereum was (and remains) to provide viable support for application development. These DApps aim to facilitate services by freeing themselves from intermediaries. They are part of the revolution carried by DeFi.
Is ethereum a good investment 2021?Ethereum or ETH is the second cryptocurrency on the market and therefore the main competitor to Bitcoin. However, the ETH was not originally intended to become a popular digital currency. Indeed, the creator, Vitalik Buterin wanted to design a blockchain in 2015. The goal was to create a smart contracts to simplify and secure online transactions. Today, the Ethereum corresponds to a unit value of more than 200 euros. It represents a market capitalization of more than 20 billion euros and a total market volume of more than 110 million euros. Ethereum has one of the biggest potential for 2021. Thus, having a few ether is always a good things.
Will ethereum take over Bitcoin?The total value of Ethereum’s transfers, at $3.08 billion, exceeded that of Bitcoin by about $80 million. While the price of the ETH/USD pair seems to be moving away from last week’s turmoil, the data show that daily transaction costs on the network have reached new heights. Arcane Research notes that on September 9, transaction fees reached $17.5 million. Increased profitability on the Ethereum network has also pushed hashrate to new highs above 230 TH/s for the first time since July 2018. Daily Eth Ethereum Fees / hash rate dashboard. Source: Arcane Research Ethereum also toppled Bitcoin in terms of total transfer value. Data provided by analytics firm CoinMetrics show that Ethereum’s adjusted transfer value (7-day moving average) reached $3.08 billion to surpass Bitcoin at $3.01 billion. This “turnaround” is the first time since January 2018, when Ethereum reached its highest prices of all time. This latest increase is largely due to the increase in activity due to decentralised finance (DeFi). The amount of Ethereum encased in the yearn.finance safe is also an essential element of this outbreak. As users seek to earn income from their blocked assets, the total value placed in the yETH vault exceeded 200,000 Ether.
Should I buy ether or bitcoin : Final toughtsCryptocurrency is still in its infancy. For some experts, this period reminds us of the first steps of the internet where several major players were competing. The future showed who came out the winner of this competition. For the crypto, it will be the same. Many currencies will disappear while others will assert themselves. With their success and robust structure, there is no doubt that Bitcoin and Ethereum will have to be counted on in the future. Moreover, the vocations being different between these two cryptos, no one can say that one will take the step over the other. Indeed, there is room for the coexistence of the two crypto behemo. In reality, the blockchain in general is the only winner of a Bitcoin-Ethereum duel
Best places to buy crypto
Our top crypto exchanges