Which Is Better To Invest In For 2022, Ethereum Or Bitcoin?

However, even though they both hold the largest values in the crypto market, many are concerned about who is the right one to invest in. Well, there are many differences between these two currencies, and we can clearly say that in 2022, things have changed for Ethereum and Bitcoin.

However, which coin is the ideal one to invest in? Let’s read further into this article to find out!

Bitcoin or Ethereum, who is your ideal investment?

The basics of Bitcoin

Bitcoin sparked a light into the crypto world back in January 2009. Satoshi Nakamoto initially created Bitcoin, and the promise it offers is that it, and other cryptocurrencies, aren’t backed up by any central authority. There are no physical Bitcoins that you can use as you do with fiat currencies. It’s all online and can only be used online.

Bitcoin was definitely not the first try at setting up an online currency, but comparatively, it has managed to succeed. Above all, if it weren’t for Bitcoin, we wouldn’t see any other cryptocurrencies. However, even if we did, it would be much later than Bitcoin, and we wouldn’t know if they would have been a success or not.

Other than that, due to a global market crash in the crypto market, Bitcoin holds a value of $21,000 but managed to reach an all-time high last year, at $69,000. Bitcoin’s market cap is at $400 billion as of now but might become even larger over time. However, let’s keep in mind that Bitcoin has a limited supply rate of 21 million.

 Furthermore, Bitcoin is considered the ‘Godfather’ of cryptocurrencies, so it’s most likely available to buy on most crypto platforms. Nevertheless, there are even platforms that are specifically created only for buying Bitcoin!

The basics of Ethereum

Ethereum was launched in July 2015. It’s considered the best and most open-end decentralized software platform in the world. Ethereum paved the way for decentralized apps (dApps) and smart contracts that operate without any fraud, downtime, or third-party interference. It has its own programming language and allows developers to build and run apps.

All of the potential applications created on Ethereum are powered by its native token- ETH. ETH serves two main purposes: being able to run applications and being traded as a digital currency. When it comes to payments, Ethereum is more commonly used than Bitcoin.

Moreover, Ethereum’s market value is around $1,200 as of now but reached an all-time high of nearly $5,000 last year. Ethereum has a market cap of $143 billion and a market supply of 121 million. However, Ethereum has no supply rate limit compared to Bitcoin, so it can never run out.

Key differences between Bitcoin and Ethereum

Concepts

Bitcoin allows peer-to-peer (P2P) transactions and acts as a substitute for fiat currencies, but it still isn’t as widely used as fiat currencies are. With Bitcoin, you won’t need to pay high transactional fees; above all, you don’t have any central authorities that regulate how Bitcoin works.

Ethereum allows P2P transactions just like Bitcoin. However, it provides a platform that will enable you to establish smart contracts and distribute applications. Smart contracts allow users to exchange multiple values such as money, real estate, and more.

Mining

Bitcoin mining allows you to validate transactions as proof of work. This is a similar case for Ethereum. Miners worldwide have the same purpose, to add a block to a blockchain at all times.

However, Ethereum is trying to change its mining ways and is planning on moving to different forms of transaction validation, known as proof of stake. Proof of stake means that the miner is allowed to validate or mine transactions within a block based on the number of coins an individual owns. The more coins you own, the more mining power you’ll have.

Comparatively, every time you mine Bitcoin and add a block within the blockchain, you’ll be rewarded more than Six Bitcoins. As for Ethereum, the reward is three. So in this case, the reward is much higher for Bitcoin.

However, let’s not also forget that Ethereum will reduce power consumption by 99% either this year or the next!

Fees

Transaction fees between Ethereum and Bitcoin differ. With Bitcoin, If you aren’t the miner, your transaction will go through even if you aren’t the person mining and choose not to pay a fee.

However, with Ethereum, it isn’t the same story. You must own some amount of ETH for your transaction to succeed. Your ETH will be converted into a unit called ‘gas’, and this unit will allow your transaction to get added to the blockchain.

Speed

When we talk about speed, the win goes to Ethereum here. It only takes 10-15 seconds for a block to be added to the blockchain for Ethereum. However, with Bitcoin, it takes anywhere up to 10 minutes!

Market Value

Now, when we take the two crypto giants, we know for sure that Bitcoin shares the most market dominance. Currently, it is dominating nearly half of the market share and holds a value of around $20,000. On the other hand, Ethereum holds only 20% of the market dominance and has a value of about $1,000.

 However, even though Ethereum has a lower value, don’t think it’s not the better option. Once the market re-stabilizes and both Ethereum and Bitcoin regain value, you might earn more returns with Ethereum than Bitcoin. You may be wondering why? Well, if you really think about it, Ethereum’s price point is low and has a low value, so it has more potential for multiplying than Bitcoin.

On the other hand, Bitcoin has the largest market value, and even if it reaches an all-time high of $70,000, you’d only be earning three times more returns. On the other hand, if Ethereum reaches an all-time high of $5,000 or more, you’ll be making five or more times your investment.

Moreover, their volatility rates are pretty identical, so there’s no “Safer” coin to invest in.