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Bitcoin vs Ethereum: Whats the difference?

Bitcoin, Ethereum, and the rest make the most dramatic moves when there’s dramatic news in the headlines. For example, when there’s a fresh rate hike or another crypto scandal on the negative side; contrarily, when there’s a new adoption by a big company or central bank in the positive realm. CoinFlip founder Daniel Polotsky explains this very well in his Ethereum price prediction. P2P platforms like LocalBitcoins and LocalCryptos boast of having the highest number of accepted payment methods, including WeChat Pay, Wise, M-PESA, Revolut, Western Union, and possibly hundreds more. The approval would be a big win for firms looking to offer the product, including ProShares, VanEck, Roundhill, Volatility Shares, Direxion, Bitwise, and Valkyrie.

It’s designed to facilitate the exchange of smart contracts, decentralised applications, and non-fungible tokens. With that said, knowledge of these uses isn’t necessary for those wishing to invest in ETH. The No. 2 cryptocurrency by market cap, Ethereum (ETH -1.01%), was up by nearly 3% across the preceding 24 hours as of mid-afternoon Wednesday. Ethereum-staking company and crypto miner Bit Digital (BTBT -4.88%) saw its stock close nearly 9% higher on the day, as fellow miner TeraWulf (WULF 0.80%) rose at an almost 11% clip. Ethereum’s EIP1559 upgrade, which “burns” ETH (see here), will also help to control the issuance of ETH and its scarcity. Burning refers to the process of permanently destroying a portion of ETH coins on each transaction.

“We are concerned about [the] rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal,” tweeted Musk. Unlike other applications, most digital wallets cannot be reset if you forget the passphrase. Users have lost hundreds of millions of dollars worth of cryptocurrency due to forgotten passwords or lost devices. This property makes cryptocurrency attractive to people who are worried about hyperinflationary events, bank failures, or other disaster scenarios. Bitcoin in particular has attracted attention due to its deflationary and censorship-resistant properties, leading proponents to describe it as “digital gold.” Bitcoin has been used by many investors this year as a hedge against a drop in the purchasing power of U.S. dollars.

  • Whichever option you choose, make sure you’ve done your research and are comfortable with risk.
  • Ether is considered the currency of “the world computer,” which aims to build an ecosystem of decentralized applications.
  • Cryptocurrencies are famously volatile, in part because of the self-reinforcing effect that their popularity can have.
  • Thus, when most new investors begin to dabble in crypto markets, they’re more likely to recognize — and therefore invest in — Bitcoin.

After reading the pros and cons of each cryptocurrency, you might be wondering if Ethereum is better than Bitcoin. Well, it really depends on what you’re looking for in a cryptocurrency. In this blog post, we will explore all of the pros and cons of these two cryptocurrencies, so that you can make an informed decision about what to do with your money. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns.

In addition to mastering the complex security protocols and thoroughly researching their new investments, they should also take the time to understand the most common pitfalls that befall novice investors. This potential makes for an attractive investment to people who believe in the future of digital currencies. For people who believe in that promise, investing in cryptocurrency represents a way to earn high returns while supporting the future of technology.


The author has not received compensation for writing this article, other than from FXStreet. Halvings are typically considered bullish events as they slash the block reward in half for miners, constricting the supply of the asset. At consistent demand if the supply reduces, the asset’s price climbs. Nevertheless, regulatory uncertainty continues to hold the market hostage, particularly where disruptive innovations are concerned.

When Ethereum becomes more energy efficient, it could acquire a competitive advantage in the crypto industry and a leg up over Bitcoin. If you’re analysing the pair through an environmental lens, then Ethereum is superior in the sense that it has moved away from the more energy intensive ‘proof of work’ model to ‘proof of stake’. While Ethereum does enable payments using its internal ETH cryptocurrency, its scope is much broader than Bitcoin’s—by design. Bitcoin’s market cap is around twice that of Ethereum, at around $900 billion dollars to $400 billion. Ethereum uses ethash, which is different to the SHA-256 used by Bitcoin. It’s not necessary to understand these technical differences to trade in either currency, but doing so can’t hurt.

When comparing offers or services, verify relevant information with the institution or provider’s site. Whether products shown are available to you is subject to individual provider sole approval and discretion in accordance with the eligibility criteria and T&Cs on the provider website. If you’re a beginner, the first thing you need to do is learn the craft. As the original smart contract blockchain, Ethereum has garnered incredible network effect over the years and acted as a springboard for many of the world’s biggest crypto projects since 2017.

With that in mind, Insider decided to reach out to the experts to see which cryptocurrency they believe offers the most upside over the long haul. Ethereum (ETH -0.98%) has been making waves in the crypto world, rivaling Bitcoin (BTC -0.63%) as one of the most popular cryptocurrencies. It’s also experienced explosive growth, with its price increasing by more than 1,000% over the past 12 months. While Bitcoin’s uses what is known as proof of work, Ethereum is moving towards a proof of stake consensus mechanism.

Why Bitcoin Is Outperforming Ethereum, Enjin Coin, and Decentraland

That announcement was one of the reasons behind the most recent crypto crash as investors questioned whether cryptocurrency could really thrive over the long term. But an educated opinion of future token value requires a prediction for future demand. Thinking through both supply and demand led me to buy an equal amount of bitcoin and Ether over the thousands of other options. In my opinion, they’re the two most likely cryptocurrency candidates to be in demand going forward and the ones I would buy today (but more on that in a bit). However, I believe there’s a fundamental economic principle we can use to our advantage.

And even though it appears my thesis is playing out, I won’t consider adding more even as prices rise. Since cryptocurrencies don’t have intrinsic value, the risk is simply too asymmetric for me. The easiest way to buy cryptocurrency of any kind is via an exchange. These services will provide you with a safe way of trading with others. Different exchanges will allow you to buy and sell BTC and ETH at different prices, and in different parts of the world. You can use Cryptoradar to compare your options based on your own criteria.

Now that cryptocurrency prices are falling, it can be a smart opportunity to “buy the dip” and invest in Bitcoin or Ethereum while they’re more affordable. But if you have limited funds available to invest, which cryptocurrency will give you more for your money? While the two cryptocurrencies are very different in terms of their architecture and use cases, both are top options for cryptocurrency investors long-term.

We make it easy to buy Bitcoin or other cryptocurrencies with a retirement account easy and quick, and you can invest in Bitcoin and Ethereum as part of your long-term retirement strategy. Bitcoin and Ethereum have also both attracted institutional investors’ attention. In recent months, major announcements from multi-million-dollar companies have rocked the news, with enterprises like MicroStrategy and Square announcing their plans to hold Bitcoin as a reserve asset.

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