Is Ethereum Better Than Bitcoin as an Investment?

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    Ethereum and Bitcoin are two of the most popular cryptocurrencies. Today it is hard to find a single wallet that doesn’t have at least 1 dollar worth of one of these assets. Yet many doubt which coin deserves more attention.

    Being the first crypto, Bitcoin has definitely gained more holders. However, a part of them is now switching their BTC to ETH

    Is it the right decision? Which coin is better in terms of performance, tokenomics, and prospects? Let’s investigate together!

    How Does Ethereum Work?

    Ethereum is a protocol for launching decentralized applications running on smart contracts. Ether (ETH) is the currency of exchange within the ecosystem. The idea of Ethereum is to create and run various codes in a distributed network. 

    Also, the Ethereum blockchain is a database designed to add information. Once information is added, the data cannot be changed or deleted. Ethereum contains millions of transactions that are grouped into blocks along with smart contracts. Blocks form a sequence — a complete record of the history of Ethereum. The database is synchronized through a decentralized network. This makes the network available to anyone who can use the Internet.

    Ethereum captures everything that happens on the network in real time. A copy of each transaction is distributed throughout the network. Each node on the network keeps a copy of this history.

    How Does Bitcoin Work?

    Bitcoin is a decentralized peer-to-peer network that enables transactions between people without a third party. The Bitcoin protocol is publicly available and developers can review the code and easily adapt the open-source software and remake it for their needs.

    Information is recorded on the blockchain instantly. It is available to everyone and contains all transactions from the very beginning of the Bitcoin network. All transactions are confirmed by the network through the mining process.

    Bitcoin and Ethereum: Pros and Cons

    Being two separate blockchains, both have their advantages and drawbacks. Let’s consider the main pros and cons of each technology.

    Pros and Cons of Bitcoin

    BTC is still the #1 crypto in the world, but it has its own advantages and drawbacks.

    Pros

    • One of the most decentralized systems nowadays;
    • Support by different institutions;
    • Support by all crypto exchanges;
    • High liquidity;
    • Wide network of BTC ATMs;
    • Deflation emission model.

    Cons

    • BTC mining requires a lot of computing power;
    • Many call it relatively non-environmental;
    • The speed of transactions is quite low;
    • Little technological progress since launch.

    Pros and Cons of Ethereum

    Ethereum is a younger but more advanced technology with its own set of benefits and disadvantages.

    Pros

    • Network speed. It takes 10 minutes to generate a block on the Bitcoin network, and about 15 seconds on Ethereum;
    • Constant blockchain improvements;
    • Environmental friendliness (since the Merge);
    • Wide ecosystem of Dapps and smart contracts;
    • Support by all crypto exchanges;
    • High liquidity;
    • Well-known founders;
    • Deflation emission model.

    Cons

    • Poor decentralization (compared to BTC);
    • High gas fees;
    • Scalability issues.

    How Do Bitcoin and Ethereum Compare?

    Bitcoin Ethereum
    Project start 2009 2015
    Founders Satoshi Nakamoto Vitalik Buterin, Gavin Wood, Charles Hoskinson, Anthony Di Iorio, and Joseph Lubin
    Main purpose Payment system, store of value System for developing and launching decentralized applications based on smart contracts
    Hashing algorithm SHA-256 Ethash
    Security protocol PoW PoS
    Supply 21,000,000 BTC Unlimited
    Time of new block creation about 10 minutes 12-15 seconds
    Reward per block 6.25 BTC 2 ETH
    Capitalization $370 billion $160 billion

    Which Investment Is Right for You?

    As you can see, the decision to convert your USDT to ETH or BTC may bring some benefits in the future. And while both Bitcoin and Ethereum are quite promising, our recommendation would be to have equal shares of each one in your portfolio.

     

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