High-Profile Cryptocurrencies; Bitcoin and Ethereum
It’s no surprise that Ethereum and Bitcoin are garnering a lot of traction. Both were created by developers who wanted to create a decentralized network. Bitcoin was the first cryptocurrency ever created. Five years later, Ethereum emerged, heavily inspired by bitcoin but operating very differently.
A comparison Of Bitcoin and Ethereum
From a financial point of view, risk profiles and monetary policies are key aspects investors tend to look at. In a nascent market, bitcoin has survived the longest and provides great security guarantees.
This is not the same case as Ethereum. Even though it can still be credited with being highly secure, it simply cannot provide the same guarantee as bitcoin. In addition, Ethereum smart contract layer has brought about numerous risks. One of the most infamous vulnerabilities brought along is the DAO attack.
Ethereum supply is considered to be technically limitless. As a result, investors are wary of it. Without defined scarcity investors tend to be quicker to pick up on Bitcoin due to its simple nature.
Bitcoin and Ethereum tend to offer different utilities. Bitcoin users can transact anywhere in the world at a minimal cost. This provides users with a deflationary currency whose monetary policy cannot be changed.
Of late, Bitcoin’s utility has diminished due to its price volatility and sluggish network. Its lightning network protocol has attempted to reintroduce it as a payment method. However, users prefer holding their BTC overspending it. On the upside, it has become a type of digital gold that is slow to move but highly secure.
On the other hand, Ethereum is famous for having enormous utility. It’s difficult to summarize its utility succinctly. Very few people were able to predict the new technologies that exist within Ethereum today at its inception.
From an ethical standpoint, these two cryptos also differ. Bitcoin was borne out of libertarianism, the need to untether from government policy and put value back into the hands of self-sovereign individuals. Its developers and users have guarded these ideals by rejecting all but essential code changes to maintain the blockchain’s original function.
Ethereum was formed around similar principles but with a less idealistic approach. Its blockchain has been upgraded on countless occasions. Its users and developers want to see it adapt to changes over time. Unlike Ethereum, Bitcoin developers tend to downplay human involvement in the blockchain.
Bitcoin has been the pioneer in the digital currency sphere and has been highly successful. However, as Bitcoin goes into a sort of stalemate mode with the ongoing block size debate, new digital currencies are seeking to revolutionize the currency world. Ethereum is deemed to be the digital currency that will revolutionize the way blockchain technology will work.
Although Ethereum’s technology could cause it to eclipse Bitcoin in future; currently, this is not likely to happen. Typically, Bitcoin has far more transaction volume than Ethereum does. Furthermore, Bitcoin is being adopted much more quickly among different industries. But they both play a significant role in the future of cryptocurrencies.
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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
DNACrypto Team
Cryptocurrency & Blockchain Experts
