Since its meager and skeptical initial reception, the internet has now become VITAL to all aspects of human life. Having brought the world closer together, the internet is the one thing that we cannot function without. Economics Nobel Prize winner, Milton Freidman said in 1990,”I think the internet is going to be one of the major forces for reducing the role of government. The one thing that’s missing, but that will soon be developed, is a reliable e-cash.”
Roughly ten years down the line, Bitcoin was created. It was the first form of cryptocurrency formed. Bitcoin has since risen to great heights and is able to boast its blockchain as the largest in the world right now. More recently, another contender has come up to the podium in the form of the cryptocurrency, Ethereum. We’ll take a look at Bitcoin and Ethereum and try to determine which is better.
Bitcoin has the largest blockchain network having been established in 2009 by the group, Satoshi Nakamoto. It is the oldest cryptocurrency that has come to be widely trusted by retailers. More than a 100,000 businesses now accept Bitcoin as a verified method of payment including big companies like Apple, Sears, Microsoft and Dell to name very few.
The price of Bitcoin has surged from $600 a year to nearly $5000. The total number of Bitcoins caps at 21 million which makes it scarce, and hence, free from the possibility of inflation. Bitcoin is free from any centralized governing system that is why it provides a sort of autonomy to the people.
The goal that Bitcoin has is to act as a peer-to-peer payment system that is not centralized. All the transactions are recorded on a public ledger so the users do not have to worry about the legitimacy of the transactions.
Ethereum is a lesser known and lesser accepted form of cryptocurrency in comparison to Bitcoin, but it has picked up pace. Like Bitcoin, it has also seen a rise in value which currently sits in the range of $300-$400 in comparison to $13 in the past year.
Like Bitcoin, Ethereum is also a payment system that is decentralized and free from government regulation but it is not just limited as that. Ethereum is a proper infrastructure. Vitalik Buterin launched Ethereum in 2015 with an initial offering of Ether, the cryptocurrency used in the Ethereum system. After raising about $18.5 million in its initial sale, it was clear that Ethereum had strong support from the start.
But what makes Ethereum so different from all the others?
Ethereum provides what Bitcoin doesn’t – a centralized platform. But it doesn’t stop at that. Smart contracts and crowdfunding are features that Bitcoin did not have. The protocol that Ethereum has built allows more flexibility to the developers and expands the boundaries of the peer-to-peer currencies such as Bitcoin.
Since Ethereum can cater to a large amount of financial derivatives, banks are also taking interest in Ethereum to create, manage and sell their latest financial products.
Which is Better?
Well, Bitcoin is safer in terms of risks involved in investments, which in turn, makes it more widely accepted.
Ethereum is cheaper than Bitcoin and provides more utilities compared to Bitcoin’s (relatively) archaic system.
Investing in either is a personal call but Ethereum seems to be the more promising investment in the current market potential-wise.