Gun to your head, “Name 7 cryptocurrencies!”
If you’re anything like the vast majority (over 95% of the crypto population), Bitcoin and Ethereum will fall among your top 5 picks. This goes to show how popular both cryptocurrencies are in the crypto space. Relative to Ethereum, Bitcoin seems to be at its peak. For the most part, it does feel like Ethereum is only just gathering momentum to claim the top spot in terms of value and market cap. But while Bitcoin comes an obvious first in this regard, should you opt to buy Bitcoin instead of Ethereum?
This article will explore the top 5 reasons you should choose Ethereum over Bitcoin without thinking twice. Sit back and relax because you’re about to learn one of the most important lessons that’ll evolve your investment journey forever.
A Little History
Before we get right into it, it’s important that you understand a few things about both Bitcoin and Ethereum.
Since 2017, Ethereum has positioned itself in the cryptocurrency ecosystem as a decentralised platform that promotes different forms of transactions in the absence of an intermediary or third party. However, it should be noted that while Bitcoin (BTC) has been around since 2008, Ethereum (ETH) was launched in 2015, selling with a unit price of $3. Although the two coins are largely distinct, they both have a billion dollars market cap; with BTC having $921,629,402,230 and ETH having $478,438,977,852. They are currently trading at $48,769.48 and $4,025.63 as of the time of writing. Both currencies share some similarities, including digital currencies that can only be accessed online through exchange platforms. Also, they are stored in wallets. They are decentralised and utilise blockchain technology- a system of distributed ledgers. For a novice just entering into crypto trading, you can consider the price movement and decide to invest in ETH, and that’s fine. But as a pro, consider the following five reasons before deciding whether to buy ETH or BTC.
The Ethereum blockchain uses a Turing-complete language that enables anyone to create smart contracts. This made it the first in the ecosystem. Simply put, smart contracts are open bits of code that can be used by anyone that has the necessary knowledge. This has made it possible for ETH to have many uses ranging from healthcare to gaming, finance, and the likes. With the aid of this new protocol, every Tom, Dick, and Harry can create their cryptocurrency token. Unlike BTC, ETH serves as a foundation where other infrastructures can be built in the crypto space. As an investor, what would you rather invest in, a car or land? Say you bought a small piece of land- developed or not- it will appreciate with time compared to a car or smartphone. An entity that continually creates value will itself become more valuable. The continual use of the ETH blockchain in disrupting various industries will consequently lead to an increase in its worth, and as such, would be a good buy in the long run.
As a result of the proof-of-work model used in generating most cryptocurrencies, including BTC, environmental concerns regarding greenhouse gas emissions have been raised. This model is based on a trial-and-error computation to discover the right nonce that will yield a valid block and, as such requires a massive amount of energy. As a result of this, the crypto space has received a lot of backlash and slow adoption by industries, as is the case of Tesla boss- Elon Musk. However, an alternative protocol is being developed for the Ethereum blockchain (EIP-3554) to allow switching to a less energy-consuming mining model- proof-of-stake. This allows users to stake their ETHs in verifying transactions while also earning rewards. Unlike the proof-of-work, the puzzle-solving step would be removed, thereby reducing energy usage. According to the Ethereum Foundation, this is predicted to bring about a 99.95% reduction in the total energy used for mining. If, as an investor, you are also an advocate for a greener environment, then I believe this should help you to make that buy decision.
NFT Grand Enabler
The recent buzz in the crypto space has been around non-fungible tokens. For newbies, NFTs were made possible due to the ERC-721 standard of the Ethereum blockchain. Since the emergence of NFTs been used to power some of the big NFT marketplaces, including opensea.io. Although current developments in the crypto space have made creating NFTs with other cryptocurrencies possible, you might still need some ETH. As a crypto creator, there is no harm in bagging a big bag of ETH. It is essential to position yourself as the NFT marketplace is still emergent.
DAOs and dApps
The position of BTC in the crypto space is due to being the first comer. However, the Ethereum blockchain and its versatility might tilt the balance between BTC and ETH with time. Before that time comes, get yourself some ETH (even if for buying’s sake). DAOs are decentralised autonomous organisations that exist on the ETH blockchain to function without the involvement of man or any third party. It can be utilised by ventures, NGOs, and freelancer networks.
On the other hand, dApps are decentralised applications built using smart contracts. Unlike Facebook and other apps, there is no central authority. dApps can be implemented in social media, banking, art, shopping, and trading platforms. According to statistics on the state of the dApps, over 2500 dApps exist on the ETH blockchain currently.
Unlike Bitcoin, with only a community of voluntary techies, Ethereum has a separate community of developers working endlessly to help the ETH blockchain achieve its full potential by developing more apps and use cases. This implies that there would be continual development in the ETH blockchain due to its extensibility compared to the BTC blockchain. Ethereum 2.0 will be fully deployed at the end of 2021, which will further help ETH secure its future position in the crypto space. Ethereum has a promising future of endless possibilities.
It is never late to dive into the crypto space. And, even if you’re already fishing from the vast pool, it’s never too late to evolve your trading game and catch bigger fish.
A newbie may think he knows the best coin to buy just by looking at the difference in their prices. But as a seasoned investor, these five reasons would guide you to a more informed decision. Consider this: with a knife, you can only cut limited things, but you can do multiple things with a pocket knife. Size is not always the most important thing. Its functionality. Although Bitcoin has lower transaction fees, a stronger mining pool, and a brand name, it is nothing more than an online currency- just like the rest. So, as you close this page, bear in mind that ETH still has many untapped potentials that you can explore as you find suitable to your numerous needs.