Bitcoin Or Ether – Which Crypto Should Investors Choose?

Bitcoin and Ethereum have led the race to make digital money the global currency choice for anyone with internet access for years – but if you want to invest in cryptocurrency, which one should you choose?

It’s about paying your money and making your choice, as everyone has different reasons for investing and their own threshold for the pain their attitude towards risk inflicts.

Read on for an overview of the two competing cryptocurrencies and some thoughts from professional investors on Bitcoin and Ether.

Bitcoin and Ether – the crypto term for the token – are the two giants of the cryptocurrency world, but they are as different as chalk and cheese.

If you are an experienced crypto investor, you will know that with the possibility of making a big profit with Bitcoin and Ether, you risk losing all your money.

Bitcoin and Ether – Digital Gold v Smart Contracts

Bitcoin and Ether are two different offers that both have their pluses and minuses.

The main distinction between Bitcoin and Ether is the intended use. Bitcoin is a fully digital currency that has gained popularity as a store of value, in the same way that gold retains its value over time. It is the most commonly accepted form of crypto payment and it has the highest volume of trade.

Additionally, Bitcoin has the advantage of scarcity and adoption rate over Ether. No more than 21 million Bitcoins will be mined. As the supply of Bitcoin is limited, increasing demand is all that is needed to increase the value of each coin.

In contrast, Ethereum’s smart contract capabilities allow a programmable blockchain platform to extend functionality

Ether’s value is unrelated to scarcity or current applications. Investors who invest in Ether do so in the hope that the technology will reach its full potential.

DeFi defines the future of ether

The key to the door is DeFi – decentralized finance – which bypasses traditional financial institutions by putting financial services on a blockchain.

Vitalik Buterin launched Ethereum in 2015. He was active in the blockchain space for a long time, but soon realized that Bitcoin was too limited. Comparing Bitcoin to a pocket calculator that does one thing well, Ethereum is like a smartphone that can run smart contracts and decentralized apps.

Smart contracts are small, self-executing pieces of code that allow developers to create apps and other cryptocurrencies on the Ethereum network. Smart contracts are essential for a variety of industries, including DeFi businesses.

Ethereum currently supports over 200,000 ERC tokens, several of which rank among the top 100 cryptocurrencies. Many cryptocurrencies are present in the DeFi ecosystem built on the Ethereum blockchain.

Bitcoin retaliates with the latest Taproot upgrade. Taproot adds smart contract functionality to the Bitcoin blockchain. It’s too early to know how well Taproot will fare against Ethereum, but the finish line is still a long way off. Although developers are starting to design smart contracts for Bitcoin, Ethereum has swarms of developers already active and is years ahead of the game.

Since August 2020, the total value locked in DeFi has increased significantly.

Decentralized finance appears to be a viable competitor to traditional centralized finance, with Ethereum playing a critical role in attracting investors and driving up prices. As DeFi grows, the greater the demand, the more valuable it becomes and the higher the price of Ethereum.

Ethereum challenges

  • Average Bitcoin cost per transaction: 173.02 USD / tx
  • Bitcoin transactions per day: 301297.0
  • Average Ethereum transaction fees: 4.719 USD / tx
  • Ethereum transactions per day: 1.248 million

Compared to some newer crypto systems, Ethereum is a slow network. While not as slow as Bitcoin, ether miners earn a lot less.

The average Ethereum user makes several transactions per day and sometimes several per hour.

The average Bitcoin user completes a few per day.

This causes Ethereum transactions to take an inordinate amount of time, increases transaction fees, and results in lost transactions. This infuriates some users, who wish they could use another smart contract solution.

Another issue for Ethereum is gas charges. Gas fees are the fees that the Ethereum network charges users to complete a transaction or execute a contract on the platform.

Due to Ethereum’s limited transaction capacity of 15 per second, gas charges increase if the network is congested. As of November 9, the average network fee for a transaction was $ 62.

To address this weak point, Buterin came up with a new Ethereum Improvement Proposal (EIP) that would address the grumbling about network gas charges by placing a limit on total transaction call data, thereby reducing the costs of transaction gas.

According to BitMEX Research, a market research organization, the update could result in a fivefold reduction in gasoline costs.

The event the crypto world is waiting for is ETH 2.0, an ongoing update that will increase Ethereum’s transaction rate to 100,000 per second.

What the experts say

Some experts predict that the release could trigger a massive increase in the value of the ether.

JP Morgan, America’s largest bank, believes Ethereum also tips the balance against Bitcoin if interest rates start to rise.

“The growing number of applications of Ethereum – peer-to-peer lending, non-fungible tokens (NFTs), games and stablecoins – should help it maintain its value in a rising interest rate environment,” said the Bank.

However, Bitcoin’s role as a store of value works against crypto when interest rates and bond yields float higher, as investors have the opportunity to take low-risk returns rather than capitalize on the volatility of crypto.

Goldman Sachs, another major investor in Ethereum, believes crypto is growing faster than Bitcoin and predicts the price will double by the end of the year, after rising more than 500% in 2021. Coinbase, the largest cryptocurrency exchange in the United States, is well positioned to profit from a surge in Ethereum by charging a fee on every transaction going through the exchange.

Coinbase trades many cryptocurrencies based on the Ethereum blockchain, which implies that betting on Coinbase is effectively betting on Ethereum. Their respective futures seem inextricably linked.

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