Removing one of the biggest bottlenecks in the crypto mining space. This points to the growing use case of Ethereum in the DeFi space. The majority of decentralized apps built in the DeFi space are built on Ethereum. As well as the majority of NFTs being minted in the booming NFT trade. These use cases put Ethereum at the forefront of blockchain development for the future. Here, we’ll look at one of the challenges facing the cryptocurrency industry, and assess whether the coming changes to the Ethereum network signal a boom-time for the space as a whole.

  • On the other hand, cryptocurrencies are new assets, and it’s uncertain whether they will see widespread adoption.
  • The Exodus Crypto Wallet allows you to swap your Bitcoin for Ethereum, or other cryptocurrencies seamlessly within the wallet.
  • Crypto investing is not as simple as calling a broker and buying or selling.
  • Higher interest rates, rising inflation and other changes in the macroeconomy are the true culprit, he said.
  • A large service provider can have an utterly massive database, contained in a server farm.
  • Bitcoin cash was created as a result of arguments over block size and Segwit.
  • As a result, when you make a purchase, you spend the entire amount of those addresses.

In contrast to Bitcoin, which has a maximum total supply of 21 million BTC, there is an unlimited supply of ETH with an annual limit of 18 million. New blocks are mined in the Bitcoin network approximately every 10 minutes, whereas on the Ethereum platform a new block is created about every 15 seconds. Since bitcoin is capped in supply, investors likely find it a better value reserve than dogecoin, which can technically be issued forever. Bitcoin is also represented on the Ethereum blockchain in the form of ERC-20 tokens. To take advantage of DApps, a tokenized version of Bitcoin was created and launched on Ethereum. While both Bitcoin and Ethereum have relied on proof-of-work consensus, Ethereum is moving away from it and into a proof-of-stake consensus algorithm.

Ethereum Risks

And with the blockchain stored decentrally across multiple computers, no hacker can access the entire chain in one go; any information stored in it is safe for good. There are more than 10,000 cryptocurrencies on the market today and each one has its own particular quirks. But all cryptocurrencies have a few things in common—like their tendency to experience sudden spikes in value. Prices are driven primarily by the supply of coins from miners and the demand for them by purchasers. The price of Ethereum, for example, roughly doubled from July 2021 to December 2021—quite the payday for investors who got on board at the right time. Due to the benefits of the existing infrastructure, ETH is quickly becoming the preferred option for those that are willaccept digital currencies as a form of payment.

bitcoin vs ethereum long-term

And because it’s the best-known cryptocurrency of them all, it’s a key target for hackers and scammers of all stripes. For more insight about Bitcoin, check out our article What is Bitcoin?. Longevity – Ethereum is the third-largest cryptocurrency worldwide. It also offers smart contracts and other decentralized applications on its network. Looking at the relatively short history of cryptocurrency provides some semblance of an answer to the question of whether crypto is a good long-term investment.

After the account is verified, investors can deposit a minimum amount of $10 . Alternatively, investors can buy Ethereum or USDT by using the Transak onramp partner. Beginning 2021 at a price of $0.005, DOGE reached a record high of $0.7 in May of the same year – a 13,900% price increase.

Ethereum is a decentralized open-source and distributed blockchain network powered by its native cryptocurrency, Ether , used to make transactions and interact with applications built on top of the Ethereum network. Ethereum’s white paper was published in 2013 by its co-founder Vitalik Buterin, detailing the use of smart contracts, which are self-executing agreements written in code. Though they are designed for different uses, the two cryptos have traded since 2018 with price correlations between 60-90%, suggesting that many people view them as similar enough in nature to be valued in similar ways as well.

What really drives Ethereum’s price though is the demand for Ether to power all of the smart contracts built on top of the blockchain. If you have a decentralized exchange, or a supply chain tracking application, you need ETH to pay for computations on that contract. The more smart contracts running on Ethereum, the more computations, the higher the demand for ETH. Several different scaling solutions like the Lightning Network, Liquid, or RSK are already under construction. If they can ever reach similar market penetration and adoption as Ethereum dapps already have today, is yet to be seen though.

Gary V Crypto

Once a valid hash is found, it is broadcasted to the network and added to a new block. The biggest issue for individual users of cryptos is that they each represent different types of transactions and can even be vendor-specific. Certain vendors, for example, will accept Bitcoin, including Home Depot, Starbucks, Whole Foods, and GameStop. On the other hand, if you want to purchase an NFT or purchase certain add-ons to online games, you’ll need ETH to do that. ETH processes transactions much faster than BTC, which in turn reduces the energy efficiency of ETH as well. Gas is the pricing value required to conduct a transaction or execute a contract on the Ethereum blockchain platform.

Ethereum may be a suitable alternative for you if you’re looking for more than just a cryptocurrency. Bitcoin keeps things simple when it comes to the scripting language. This makes the code more resilient while also making it less susceptible to bugs that plague more sophisticated languages.

What Is The Main Difference In Application Between Bitcoin And Ethereum?

Ethereum smart contracts enable the automation of financial products and more, all peer-to-peer on the Ethereum blockchain. Almost every high-value NFT is secured by Ethereum’s blockchain, including CryptoPunks, Bored Ape Yacht Club, and Art Blocks. Many new users on Ethereum were drawn to its network to invest in NFTs, so if NFTs continue to breach into the mainstream, it’s likely Ethereum will continue to gain adoption. While other platforms like Solana and Avalanche have NFTs, the market for non-fungible tokens on these blockchains is magnitudes smaller than that of Ethereum. While Bitcoin is really good as a store of value, it doesn’t support smart contracts like Ethereum does. This being said, many prefer bitcoin to store value because of its hard-capped supply.

bitcoin vs ethereum long-term

And then there’s hacking, phishing, and all the other attempts to gain control by malicious means. This is something that seasoned investors keep an eye out for, but newer investors are more likely to be vulnerable to these kinds of traps. The following statements do not constitute investment advice or any other advice on financial services, financial instruments, financial products, or digital assets.

In other words, it has to justify what the right level of partial-centralization and partial-decentralization is, and that it has achieved this sweet spot. A healthy banking system in the real world would consist of people depositing money, and the banks making various loans for mortgages and for business financing, to generate real-world utility. There is also a third category, decentralized autonomous organizations or “DAOs” that have gained a lot of press in recent months, even though they’re not on the financial scale of DeFi or NFTs yet. Overall, I view some of them as probably lasting for a long time if regulators allow them to, as information technology or financial services equities that pass the Howey Test and are therefore securities. In contrast, a PoS node operator, even with the correct software downloaded, will regularly need to reach out to trusted third parties to ensure he stays on the canonical chain. The fear of losing contact with the main network & getting tricked onto the wrong chain will continue for eternity, possibly long after the trusted third parties cease to exist!

Miners on the Bitcoin blockchain generate and broadcast these blocks through a PoW process in which machines use vast amounts of computing power to engage in hashing functions. The Bitcoin and Ethereum blockchain networks serve different purposes as do the coins and tokens operating on them. Gwei is a denomination of the cryptocurrency ether , used on the Ethereum network. It remains anyone’s guess which cryptocurrency and blockchain will stand the test of time—perhaps they both will. But one thing is certain—both have induced much-needed discussions about financial systems worldwide. A major criticism of proof of work is that it is highly energy-intensive because of the computational power required.

The protocol is designed to reduce energy expenditure during the block production process to a minimum. These risks aren’t to say that cryptocurrency cannot serve as a long-term investment. It’s simply important to identify the potential threats you may face as a crypto investor. But seasoned investors know getting rich doesn’t typically happen overnight. Despite being a relatively new asset class, cryptocurrency may already be a viable long-term investment worth your consideration.


Cardano’s approach is more research-intensive than Ethereum’s, with each stage of its development peer-reviewed and thoroughly tested before implementation. The third-generation crypto is also launching smart contract capabilities, which will help make Cardano more sustainable and scalable. As some analysts describe it, Bitcoin is Crypto 1.0, Ethereum is Crypto 2.0, and Cardano is Crypto 3.0. Indeed, Cardano was designed as the first proof-of-stake cryptocurrency, designed to provide a faster, cheaper, more secure blockchain. In terms of advantages, Volotkovich said that bitcoin has maintained a high level of dominance in relation to its security infrastructure as the blockchain was not built in such a way that it can easily be exploited. Your public key, or wallet address, is needed to send money to your wallet.

The Exodus Crypto Wallet allows you to swap your Bitcoin for Ethereum, or other cryptocurrencies seamlessly within the wallet. Get started on your crypto journey today by downloading the Exodus Android Bitcoin Wallet or the Exodus Apple iPhone Bitcoin Wallet. Ethereum also recently released their Proof of Stake consensus mechanism. Several astute market commentators have likened staked ETH to a treasury, since it’s essentially a risk-free way to earn a return. Ethereum is highly programmable which means that you can create all sorts of applications. Furthermore, rather than starting from scratch developers can streamline the development process by linking existing protocols together.

Its beginning can be traced back to the publication of the Ethereum whitepaper in 2013 by Vitalik Buterin. In 2014, an initial coin offering was held in which a pre-mined amount of Ethereum was released to investors who primarily bought in Bitcoin. Vitalik Buterin is still active in the Ethereum project, where he plays a key leadership role. Anthony Di Lorio, Charles Hoskinson, Mihai Alisie, Joseph Lubin, Gavin Wood, and others were among the early leaders. Satoshi Nakamoto published the white paper that gave birth to Bitcoin in 2009. There was no crowdfunding, and the initial Bitcoins had to be mined on the Bitcoin network.

As crypto prices see recovery, debates over the best platforms persist. Ethereum is an unregulated digital currency that can be mined effectively by most modern graphics cards . Mining Ethereum is actually quite simple, and can generate passive income for people with low electricity costs. “Proof-of-work is the most proven in terms of network security and decentralization. The jury is still out on the long-term viability of proof-of-stake and to what extent it will be centralized versus decentralized,” Sandström told CoinDesk.

Ethereum’s Proof-of-Work blockchain has a well-established record. A network of miners computes complex calculations to keep the blockchain running. Proof-of-Work allows Ethereum to attach a physical value to its transactional system. SmartAsset Advisors, LLC (“SmartAsset”), a wholly owned subsidiary of Financial Insight Technology, is registered with the U.S. SmartAsset does not review the ongoing performance of any RIA/IAR, participate in the management of any user’s account by an RIA/IAR or provide advice regarding specific investments.

The more energy that Bitcoin’s network uses, the more secure that its latest transactions are against most types of attacks. The network is programmed to target average block times of ten minutes, meaning on average every ten minutes a block of thousands of transactions is added to the blockchain. Bitcoin and Ethereum are blockchain projects with different goals. BTC was designed as an alternative currency while Ethereum was built with smart contract capabilities. As a result, many developers have used Ethereum’s platform to build their decentralized products like Aave and Uniswap. Whether Bitcoin Cash constitutes a good investment also depends on how you expect the cryptocurrency to perform in the future.

Bitcoin Vs Ethereum: Which Crypto Is A Better Buy?

The cost in Bitcoin is for completing transactions, and it is solely determined by the quantity of the data included in each transaction. This implies you’ll have to spend money Ethereum vs Bitcoin on electricity and technology to safeguard the blockchain through mining and hash power. Bitcoin can also serve as insurance against a collapse of the global financial system.

Use Cases: Bitcoin Vs Ethereum

Solana claims it can process about 50,000 transactions per second, compared with the 15 to 45 transactions per second handled by Ethereum. This can allow Solana to scale up rapidly, one of the major requirements for a coin to catch or even surpass industry leaders Bitcoin and/or Ethereum. Here are three cryptocurrencies that various experts and market analysts think have a shot at being contenders.

As the transaction problem grew in magnitude, the Ethereum development community started working on a fix. It was hoped that changes made to the way that Ethereum functions would result in the platform being able to handle in excess of 100,000 transactions per second, and the concept of Ethereum 2.0 was born. In addition to this, the Ethereum network charges exorbitant gas fees – another term for transaction costs, essentially – with some, depending on the protocol used, being as high as $50 for a single swap. The price of Bitcoin took a bit of a hit recently, provoking some crypto-currency experts to suggest the market is heading into bear territory in 2022.

How Many Btc And Eth Are Currently In Circulation?

Dogecoin has emerged as one of the best meme coins in the last few years. After its social media popularity following the coins’ backing by Tesla CEO Elon Musk, DOGE became one of the most popular cryptocurrencies in the world. However, BTC is known to face regular price volatility, with regular price corrections following bull markets. Since the token has regularly provided profits in the last decade, Bitcoin can be one of the best crypto for HODLing in 2022. MATIC, the native crypto, plays an important role in governing the on-chain transactions and settling transactions between the different parties. MATIC makes Ethereum and other cryptocurrency networks more scalable by leveraging Optimistc Rollups – Layer 2 protocols.