The crypto market is a relatively new and emerging market that has taken the trading and investing world by storm in recent years. The rise of blockchain technology has paved the way for these digital tokens known as cryptocurrencies to emerge.
Cryptocurrencies are digital tokens with market value, similar to fiat money having value. However, rather than being issued by a government, cryptocurrencies are decentralised and exist on a shared network run on blockchain technology.
Why Compare Crypto Tokens?
Bitcoin (BTC) and Ether (ETH) are two of the most popular coins in the market, and chances are, you’ve already heard of them. The question is, which is better? Those wanting to take advantage of the crypto market would surely have made comparisons between the different popular cryptocurrencies available, most notably Bitcoin and Ether.
Now, why would we be so interested in comparing two of the most popular coins in the crypto market right now? Whilst both these coins are in essence digital tokens with market value, they have very different purposes.
All cryptocurrencies can be used similarly to fiat money in the sense that they can be stored or used as an asset in financial transactions. When it comes to Bitcoin, most people view it as an excellent store of value due to its scarcity. However, in the case of Ether, it is mostly an asset used for financial transactions due to the existence of Ethereum which we will touch on further down below.
Despite being similar in many ways, the nature of the coin creates differences in how they are used, which gives rise to the question, which is better?
What is Bitcoin?
In the simplest of terms, Bitcoin is a digital token, held mostly due to its use as a store of value. In fact, most cryptocurrencies can be viewed as a store of value, but Bitcoin is one of the most popular coins to be used as such due to its relative stability and scarcity.
There can only be 21 million Bitcoins in existence at any one point in time. Each day, there is a limit as to how many coins can be mined, which means that it can be treated as a scarce resource. This system that works due to the existence of a decentralised system is what allows Bitcoin to carry value. To be more specific, Bitcoins scarcity is created by the implementation of a system known as proof-of-work mining.
Similar to the likes of gold or money, Bitcoin is typically owned for the reason that it is an asset that can be used as a store of money.
However, unlike money, there doesn’t have to be the presence of an intermediary such as a bank when carrying out transactions. The purpose of blockchain technology on which these cryptocurrencies are built is to remove the need for third parties, resulting in fast transaction speeds.
What Is Ether?
Similarly to Bitcoin, they are also digital tokens which have market value, and they can definitely be seen as stores of value as well. However, with Ethereum, Ether’s use far extends to just being stores of value.
To understand the difference between owning Bitcoin and Ether, we first have to understand what Ethereum is. Ethereum is a decentralised software built on blockchain technology, and the resource used to run things on the network is none other than the Ether coin, its native crypto token.
Unlike Bitcoin, which is used mostly as a store of value or simple transactions, Ether’s use goes far past that due to the existence of Ethereum. Blockchain technology is a growing technology with a multitude of applications and Ethereum gives users access to the wonders of this technology.
Yes, Ethereum can be used as a platform for Ether to be utilised similarly to Bitcoin, for simple financial transactions. However, it also provides so much more than that. By taking advantage of blockchain technology, it is possible to develop applications, run Defi protocols, create smart contracts, create NFTs, and run more complex financial transactions. Essentially, Ethereum is a decentralised operating system that developers can make use of. At the heart of all this is Ether, the resource used to allow developers to make use of Ethereum’s network. This gives Ether value as a digital token, and its market performance is directly related to how well Ethereum performs as well.
So Which Is Better Ethereum Or Bitcoin?
With Bitcoin, what you get is a very good cryptocurrency to be used as a store of value. As one of the first ever crypto coins to be created, it has come a long way and its refined proof-of-work system has allowed it to appreciate in value over the years and is currently the most expensive cryptocurrency as of now. As a replacement for fiat money, Bitcoin is certainly a very viable option.
However, looking at Ether instead, it has less power as a store of value — there is no lifetime cap for the number of coins that can exist and is a younger crypto token. However, where its strengths lie is where Bitcoin falls short. Ether has more value when used as a resource for development on the Ethereum Network. As a cryptocurrency, its value lies beyond just being a store of value, but carries the purpose of fueling activity on the blockchain network developed by Ethereum.
With the differences between Ethereum and Bitcoin explored, we can say that Bitcoin will always be a good investment as it is one of the best cryptocurrencies around. However, Ethereum carries potential, something that Bitcoin lacks. With the possibilities that Ethereum provides for blockchain technology development and the upcoming release of Ethereum 2.0, Ether may surpass Bitcoin as the most valuable cryptocurrency in existence due to the usefulness that the coin carries.
However, it may not be as stable or prolific as Bitcoin right now. Rather than investing in one, many suggest looking into diversifying your portfolio with both coins. That way, you can take advantage of Bitcoin’s current standing as one of the best cryptocurrencies available, and the future potential of Ether and Ethereum.