Cryptocurrency’s challenge to be a big player – or eventually even the only player – in financial operations is predominantly headed by two cryptos. One of those is Bitcoin, the crypto which started the whole crypto movement and the cryptocurrency that most people know of even when not involved with the industry. Bitcoin is lightyears ahead when it comes to market value and that includes its nearest rival Ethereum.
Ethereum has predominantly sat second on the crypto podium, with some infrequent spells in third place when overtaken by Ripple, another established digital coin. The first-second order has been cemented in place for so long, and in spite of the fact that an increasing number of operators like Luno offer a solid Ethereum wallet service; many experts and industry commentators are still asking if things will ever change.
Bitcoin and Ethereum Compared
To work out if Ethereum will ever surpass Bitcoin in value and use, it is essential that the differences between them are fully understood.
Bitcoin is a cryptocurrency that was developed as a way to enhance the way global transactions, or peer-to-peer transactions, happen. It is a coin with a monetary value that makes local payments and payments that cross borders faster, safer and often cheaper. The security of these payments is a big draw in and is only possible because of blockchain technology.
Ethereum, on the other hand, is quite different. It does not have the primary goal to make peer-to-peer payments easier, but rather, to facilitate processes. It is used as a token within a system and supports business tools. Smart contracts are the most noteworthy, and it is extensively used to fund dApps.
So, Why Does This Matter?
Looking from a distance, it would be hard to see Bitcoin to be overtaken by any current cryptocurrency. The trading value is higher and receives more attention in the media, by investors and by novices entering the crypto trading game. However, the market for Bitcoin is capped, unlike Ethereum at present, which down the line may cause problems and give Ethereum a boost.
The differences in usage do suggest that it is not completely outlandish to think that one day Ethereum will dominate over Bitcoin. Whereas Bitcoin will remain a strong option for those needing convenient and secure transfers, Ethereum may tap into new processes and business needs. In short, the near future of crypto will remain in the hands of Bitcoin but Ethereum could be the biggest crypto in time.
What Does That Mean for Investors?
One of the first rules of investing is diversification. This rule should apply when investing or trading crypto and backing both Bitcoin and Ethereum is a safe bet. If you are a Bitcoin fanatic, it may be worthwhile to consider Ethereum now, rather than later.