Bitcoin and Ethereum are the market leaders in crypto. Cryptocurrencies today have a huge market in the digital world. These cryptos work on the Blockchain mechanism. Since their launch in the financial markets, they have become a major mode of payment for people. And because of their extraordinary returns, all kinds of investors wish to diversify their portfolio to cryptos as well. But the maximum portion of those investors do not understand anything about cryptos or don’t have the time to study the market. Then there are many people who just enjoy the crypto markets from afar and don’t want to invest. Because of the extreme volatility in the crypto markets.
The best option for such investors is to invest in the cryptos like Bitcoin and Ethereum. Bitcoin and Ethereum are the two largest cryptocurrencies by Market Value. 1 Bitcoin is worth $62,800 and the total market value of Bitcoin is $1.185 Trillion. While 1 Ethereum is worth $4,100, and the market value of the whole Ethereum chain is $487 Billion. When combined together these two cryptos alone contribute 55.56% ($1.672 Trillion) to the whole crypto market.
Bitcoin launched in 2008 is also the first crypto. It was founded by Satoshi Nakamoto (Japanese). Since then it has ruled the crypto market and has provided huge returns to its investors. On the other hand, Ethereum was launched in July 2015 by a small group of crypto enthusiasts. Even Ethereum has provided high returns to its investors. The functioning of both Blockchains is totally different. So, the investors who wish to invest in the crypto markets should definitely start with either of the two, or both.
Understanding Bitcoin And Ethereum
As mentioned above, the functioning of both these currencies is completely different from each other. And for an investor who is looking to invest for the long term, should understand them better. So below you can find how exactly are these currencies different from each other.
Bitcoin is an open-source decentralized blockchain network. The data or transactions made on the Bitcoin blockchain network are secured via cryptography. No individual or Governmental Authority or institution solely controls Bitcoin. Its transactions are verified through a very safe and efficient process called mining. Any person can be a Bitcoin miner, you don’t need to give any exam or prepare for an interview to be a Bitcoin Miner. A minor’s task is to verify different transactions that come their way.
Working Of Bitcoin
It works on a PoW mechanism(Proof Of Work). PoW mechanism makes the minor make effort to be able to verify the transactions, by forming complex mathematical algorithms that a minor must solve to receive the transaction.
PoW mechanism requires a lot of energy from computers and machines.
And therefore isn’t very environmental-friendly. In fact, this was the reason why Tesla stopped accepting payments in BTC for its cars. Which led to a huge crash in the whole crypto chain. But its developers are constantly working on how they can change that factor in Bitcoin. If we keep this point aside, Bitcoin is still the leader of the crypto markets and has dominated the crypto payment industry.
Working Of Ethereum
The second most popular decentralized blockchain network is Ethereums’. It was launched in 2016 and has lots of extra features like smart contracts. Smart contracts were first launched by Ethereum which led to its success in the crypto markets. Smart contracts are simply programs stored on a blockchain that run when predetermined conditions are met. They are typically used to automate the execution of an agreement so that all participants can immediately be certain of the outcome, without an intermediary’s involvement. Smart Contracts can also automate a workflow, triggering the next action when certain conditions are met.
Ethereum is not as common as Bitcoin as a mode of payment. The main feature of Ethereum is its blockchain network. Ethereum also specializes in providing secure blockchain services to large corporates. Ethereum basically holds the monopoly in the Blockchain business. These new features of Ethereum like Smart Contracts and its Blockchain networking have a large scope in the market today and will increase in the future eventually.
So an investor can invest in any of these currencies as they seem fit. Ethereum though may be a better choice as it has the kind of features that are in trend and its blockchain development team is constantly working on bettering and developing its technology. Bitcoin is the market leader today, but if it does not become environmentally friendly soon enough, it may not be the market leader tomorrow.