Bitcoin vs. Ethereum – which cryptocurrency is best?
For many, the choice is between Bitcoin (BTC) and Ethereum (ETH) when buying cryptocurrency. It can be difficult to get an overview of which alternative is best for you.
In this guide, we will explain to you the similarities and differences between Bitcoin and Ethereum. That way, you can more easily find the cryptocurrency that is best suited for you.
A little about the differences between Bitcoin and Ethereum
Bitcoin has been at the very top as a cryptocurrency since its inception in 2009, also when looking at market value. At the same time, Ethereum has been a leader as altcoin, ie the leading alternative to Bitcoin. These are perhaps the two largest cryptocurrencies in the world.
Unlike Bitcoin, Ethereum is a multi-purpose platform. Ethereum is not only a cryptocurrency, but is also behind software of various kinds. Bitcoin is more or less exclusively a cryptocurrency.
Through Ethereum, you can get smart contracts and a number of decentralized apps. Bitcoin also uses a Proof of work (PoW) algorithm, while Ethereum is based on Proof of Stake (PoS).
In short, this means that Ethereum allows for a reduction in resource-intensive blockchain use in its network. However, Bitcoin can point to advantages such as a more stable exchange rate than Ethereum, and is also the most well-known cryptocurrency worldwide.
Briefly about Bitcoin
Bitcoin is known to many as the world’s first blockchain for the public, and is designed to maintain, verify and secure the network. With Bitcoin, anyone can complete transactions without any third party (such as payment services or banks).
Bitcoin is now the largest cryptocurrency on the market, and also the most well-known. BTC came on the market as early as 2009, and all other cryptocurrencies that have come afterwards are often referred to as altcoins – ie alternative coins.
In other words, there is no doubt that Bitcoin is perceived as the standard in cryptocurrency.
Briefly about Ethereum
Ethereum is a digital currency unit based on the platform of the computer software company Ethereum. This cryptocurrency is known for being one of the world’s most popular decentralized payment solutions with blockchain technology.
Initially, Ethereum used Proof-of-Work as an algorithm for validating and maintaining the blockchain. However, this has gradually changed, and Ethereum is increasingly based on a betting algorithm.
Ethereum is also open to cutting process, which means that several different block chains can be run simultaneously. This can increase both the speed and throughput to the network, and is one of the reasons why it is assumed that ETH will increase in value in the coming time.
What are the main advantages and disadvantages of Bitcoin?
Are you unsure why you should or should not choose Bitcoin rather than Ethereum? To make it a little clearer to you, we’ll take a look at the main pros and cons of this popular cryptocurrency.
Both Bitcoin and Ethereum have seen a sharp increase in value in recent years. However, it is Bitcoin that is seen as the best long-term investment object of the two. Bitcoin can almost be compared to commodities like gold when it comes to investing.
Bitcoin may not make much profit in a short time, but fluctuates less in value. Bitcoin’s biggest advantage is that capitalization and a high level of interest in the currency make it more stable than most other blockchain currencies.
Perhaps the biggest disadvantage of Bitcoin is the limited speed. Ethereum and Bitcoin are operated differently. Bitcoin produces new blocks only every ten minutes as a security measure, which provides limited speed of transactions.
Another disadvantage of Bitcoin compared to Ethereum is that the former can be affected by congestion if there is a large flow of transactions.
What are the major advantages and disadvantages of Ethereum?
There are also certain advantages and disadvantages to choosing Ethereum over Bitcoin. You should consider these when choosing between Bitcoin and Ethereum.
Here we will take a closer look at the most important points.
Perhaps the biggest advantage of choosing Ethereum over Bitcoin is that Ether uses so-called smart contracts. Ether is used in a number of external projects, which has raised additional funds through Initial Coin Offering, a process that has given ETH great popularity.
All users can join the crypto projects by trading Ether.
If there is to be one disadvantage of Ethereum compared to Bitcoin, it must be the fact that Ethereum has many platforms.
This is an advantage in itself, but when many apps are to be run at the same time, competition between the blocks is won. Since many coins use the Ethereum block, high load can quickly form on the network.
This congestion can lead to slower speeds and increased transaction costs. Note, however, that this problem can probably be solved with said cutting. Then several Ethereum blockchains will be able to run simultaneously, which can make ETH superior.
What should you choose – Bitcoin or Ethereum?
Scholars argue about the best of Bitcoin and Ethereum. In short, we can conclude that Bitcoin is the best choice if you are looking for stability. If, on the other hand, you are looking for a more short-term and rapid opportunity for growth, Ether may be the best choice.
Keep in mind, however, that the trend can quickly reverse for both Ethereum and Bitcoin. One day, one currency may be a better investment object than the other. Follow the courses and stay up to date. Almost all investments in cryptocurrencies can involve great risk.
Ether can also be the preferred choice if you are looking for blockchain applications.
Hvor kan jeg kjøpe Bitcoin eller Ethereum?
Både Bitcoin og Ethereum er mulig å kjøpe hos nært sagt alle kryptobørser, siden de to er verdens kanskje mest populære former for kryptovaluta. Sjekk for eksempel ut eToro.
Hvor finner jeg kursen til Bitcoin og Ethereum?
Du kan når som helst holde deg oppdatert på Bitcoin- og Ethereum-kurser ved å sjekke ut sider som eToro, Firi og andre kryptobørser.
Hva er en kryptobørs?
En kryptobørs er en app eller nettside for kjøp, veksling, salg og eventuell lagring av kryptovaluta. eToro, Firi og Norwegian Block Exchange er eksempler på dette.