With Bitcoin (BTC) and Ethereum (ETH) reaching all-time highs in the past few years, people can get a little confused about which path to take in terms of investment. BTC obviously has a higher price, but ETH has shown signs of rapid growth, so which of them do you choose?
Well, if you need a little more information about which one you want more, let’s dive into the core of what makes them different: their blockchains and why they were invented in the first place.
Bitcoin: An alternative currency
BTC, developed in 2009 by the mysterious Satoshi Nakamoto, was intended to be a peer-to-peer electronic cash system that could potentially eliminate the need for any third parties or intermediaries.
Despite there being over 11,000 cryptocurrencies in the world today, BTC has stood at the top of the mountain because it was the first of its kind: a fully digital currency that didn’t have any physical representation—there were no bills or coins to hold. Instead, Bitcoin uses a digital wallet that helps you store, send, receive, and manage your funds. All you need is a computer or smartphone that could connect to the Internet and you’re all set.
To get your hands on BTC, you’d have to go to a traditional exchange (a platform that allows you to link your bank account and buy crypto directly) or a peer-to-peer marketplace (a type of platform that gives you more payment options such as gift cards, online wallets, and bank transfers, to name a few).
Essentially, BTC was created as an alternative to cash and a store of value, meaning that with it, you could earn money by buying BTC and using its high volatility or use it as an exchange for a good or service.
The best case for investing in Bitcoin is that, by far, it’s the most popular option. Because of its intense price spikes in the past and the adoption it has gained throughout the years, it has made a name for itself and is already globally recognized. It also has the biggest communities and some of the most passionate enthusiasts.
At the time of writing, BTC is sitting at the 50,925.01 USD mark and has a total market cap of 959,684,750,306 USD.
Ethereum: The world’s first programmable blockchain
If BTC was invented as an alternative to cash, Ethereum went a different route. It was introduced in 2013 by Vitalik Buterin as an ICO and released to the public as fully-formed crypto in 2015. What made Ethereum different was that instead of just being an alternative to cash, it made use of a programmable blockchain so that developers could build on top of it and create their own decentralized applications. Additionally, Ethereum popularized the use of smart contracts, which are contracts between traders that self-execute when the terms of the trade are met.
Ethereum’s programmable aspect is basically what led to the rise of non-fungible tokens (NFTs) built on top of the Ethereum blockchain—but that’s a story for another time.
Other than that major aspect, Ethereum is pretty much the same as Bitcoin: it has no physical representation, it’s bought on exchanges and peer-to-peer marketplaces, and it’s also a very highly traded cryptocurrency. It may not be the most highly-priced crypto out there, but a lot of people see its potential and it has gained a lot of traction over the past few years.
The best case for investing in Ethereum is that its open-source technology allows developers from all over the world to create new applications on the blockchain—and if any of those projects succeed, ETH will benefit from it as well. Also, it’s worth noting that Ethereum is in the middle of a huge update that’ll turn it into Ethereum 2.0, increasing security, scalability, and more.
At the time of writing, ETH is sitting at the 3,764.49 USD mark and has a total market cap of 441,540,171,079 USD.
Which one do you invest in?
Ultimately, the choice is yours. Would you rather invest in BTC, something that may replace cash in the distant future, or Ethereum, a platform that’s built for developers with a blockchain unlike any we’ve seen before.
The great thing about being 12 years into crypto’s lifespan is that now, there are so many resources, features, and platforms available for you to get the best of both worlds. You can exchange ETH to BTC or vice versa with a swipe of a finger.
Also, who says that you have to choose only one? You can always invest in both—after all, people do love a diverse investment portfolio.
*The content of this article is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.