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Bitcoin or Ethereum – Which Cryptocurrency Is Better?

Since Bitcoin is very decentralized, is not controlled by anyone, and is considered a kind of digital gold, it finds applications as a digital store of value. Ethereum is currently the second largest cryptocurrency and accounts for 18 percent of the crypto market. A plus point for Ethereum is the shift from energy-intensive Proof of Work to more efficient Proof of Stake.

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Bitcoin and Ethereum are the two largest and most important cryptocurrencies. But which of the two coins is actually better? And which digital currency brings investors more profits?

Things are not looking so good in the crypto sector at the moment. But that is by no means a reason to stick your head in the sand. Because there have always been huge rallies and catastrophic drops in the crypto sector. For comparison: Today, despite the crash, Bitcoin is 120 percent higher than three years ago. And Ethereum is even 842 percent higher. So the first point goes to the second largest cryptocurrencies. But what about the other comparisons?

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Bitcoin as the most valuable cryptocurrency

Bitcoin was the world’s first cryptocurrency and was established in 2009. Bitcoin represents 38 percent of the total market capitalization of all cryptos and is limited to 21 million copies. Bitcoin works through the proof-of-work process, which has been criticized for being very power-intensive. 

But let’s look at Bitcoin’s annual returns: 2011: 1468%, 2012: 189%, 2013: 5429%, 2014: -56%, 2015: 34%, 2016: 125%, 2017: 1335%, 2018: -73%, 2019: 94%, 2020: 304%, 2021: 57%, 2022 about -65.

So it can be seen that there are always huge slumps, but that Bitcoin always starts a big rally after the halvings, which occur in the four-year cycle. Since Bitcoin is very decentralized, is not controlled by anyone, and is considered a kind of digital gold, it finds applications as a digital store of value. 

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Ethereum is different. 

Ethereum as a blockchain computer

Ethereum is currently the second largest cryptocurrency and accounts for 18 percent of the crypto market. The cryptocurrency has only been around since the summer of 2015. This makes Ethereum significantly younger than Bitcoin, but it can boast an incredibly successful history. Because Ethereum usually performs better than Bitcoin in bull markets, but then loses a little more in bear markets. Investors should know that. 

A plus point for Ethereum is the shift from energy-intensive Proof of Work to more efficient Proof of Stake. This transition took place this fall and should bring further benefits to Ethereum. In addition, the blockchain is used very differently than the Bitcoin blockchain. Many other cryptocurrencies are placed on Ethereum – the so-called ERC-20 tokens. And Ethereum is needed a lot in the DeFi sector (decentralized finance) and also in the NFT area. So Ethereum is something like the lubricant for the entire crypto ecosystem.

Which cryptocurrency is better? Bitcoin or Ethereum?

In the end, you can hardly compare Bitcoin and Ethereum. Because even though both are cryptocurrencies, otherwise are very different. It probably makes sense to bet on both coins in order to participate in future increases in value and to spread the risk. 

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(Featured image by vjkombajn via Pixabay)

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Michael Jermaine Cards is a business executive and a financial journalist, with a focus on IT, innovation and transportation, as well as crypto and AI. He writes about robotics, automation, deep learning, multimodal transit, among others. He updates his readers on the latest market developments, tech and CBD stocks, and even the commodities industry. He does management consulting parallel to his writing, and has been based in Singapore for the past 15 years.