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Ethereum vs Bitcoin; Which Is The Best Investment?

|Updated December 27, 2021 08:10

What is a better investment, Bitcoin or Ethereum?


About ten years ago, the mysterious Satoshi Nakamoto published a Bitcoin white paper, which describes "A Peer-to-Peer Electronic Cash System.". Then the world has seen the first cryptocurrency that caused a revolution in the financial world.


Since then, Bitcoin has become a part of world news, culture, and the global economy, as it never intends to disappear. Moreover, the BTC price went exponentially like a rocket. A few years later, Ethereum’s project has been launched and Ether's price saw a speed growth by over 1000%.


Definitely, Bitcoin and Ether were the best investment in the crypto industry, but people were always wondering, ethereum vs bitcoin; which is better? 

Fortunately, you will be able to know the answer after you read this article.


BTC vs ETH : Overview

First of all, It is important to understand what is bitcoin, and what is ethereum, before we go to discuss their similarities and the differences between these two largest cryptocurrencies.


Bitcoin and Ethereum both are ‘cryptocurrencies’ refer to the new form of digital money that is used as a tool of exchange value within a distributed network of users (peer-to-peer) without the need for intermediaries.


Bitcoin Chart in Mitrade (Click here)

Bitcoin was the first cryptocurrency ever created, so naturally, it's the most famous one. It was launched in 2009 by pseudonymous developer Satoshi Nakamoto


The main purpose of Bitcoin was to create an independent and decentralized digital payment system based on mathematical proofs and cryptography. Unlike traditional banking systems, BTC transactions are tracked through a public digital ledger (called Blockchain).


Moreover, the Bitcoin network is using cryptography to secure the economic system and to ensure that the creation of new cryptocurrency units and the validation of transactions go smoothly.


The interesting thing about Bitcoin is that is not issued nor controlled by a single authority or entity but is rather sustained by many computers (called: nodes) spread around the world.


While how is Ethereum different from bitcoin? 

Ethereum is an open-source distributed computing platform based on blockchain technology that can run smart contracts - applications that work as it was programmed without downtime, fraud or third-party intervention.


It should be noted that Ethereum is the name of the platform, while the cryptocurrency is called Ether or ETH.

Ethereum white paper was written in 2013 by Vitalik Buterin, but it went live in July 2015. Developers looked for a way to differentiate from Bitcoin and make it exclusive with properties that stand out it in the crypto industry. They developed a new approach with a new platform and a more common script language.


Although Ethereum can be used for payments just like bitcoin, it is also designed for creating DApps (decentralized apps) and smart contracts with its blockchain platform.

Similarities Of Bitcoin and Ethereum

Bitcoin is a global digital currency that allows people to own their money instead of letting the banks or other financial institutions maintain them. Ether is also on the same side and it does the same thing.


Moreover, the system of both of these two biggest cryptos is based on blockchain which stands as a tamper-proof record of all transactions on the network, accessible to all participants.


This system is based on decentralized and these currencies do not physically present, they are only balances associated with public and private keys.


Although BTC and Ether are yet to be recognized as a formal medium of payment, they have created a strong place in the financial industry.


The interesting part of this place is that it charges a meager amount of fees compared to any other traditional medium of payment.


As it is based on the decentralized authority that regulates it, unlike those currencies that are issued by the government.

Difference Between Ethereum vs Bitcoin

It is essential to understand that despite constant comparison with Ethereum and Bitcoin, both are different projects with entirely different objectives.

What are the difference between bitcoin and ethereum?

Bitcoin is the first cryptocurrency ever, and it implemented a financial transfer system based on blockchain technology, while Ethereum took the technology behind Bitcoin and worked to expand its capabilities dramatically.


The following are the main points of difference between these two cryptocurrencies.


Round1: Ethereum vs Bitcoin Purpose

Bitcoin was created with the primary purpose of building a Peer-to-Peer Electronic Cash System according to the White Paper published by Satoshi Nakamoto.

The main idea was to create an independent decentralized electronic payment system based on mathematical proofs and encryption. 

Bitcoin built on blockchain technology to be an analog form of electronic money that can use to buy, sell and do payments online by using BTC coins. Also, It allows people to own their own money instead of letting banks or other agencies hold it.

While Ethereum is an open-source distributed computing platform based on blockchain technology. This decentralized platform produces Ether tokens which is the cryptocurrency that traded on exchanges.

So, Ethereum is not the cryptocurrency per se, but its the platform through which the Ether cryptocurrency is located.

Moreover, the Ethereum platform is based on a series of applications shared by millions of users. These applications are based on what is known as “smart contracts”.

Ethereum in its core content works to serve the platform users by providing an Ethereum portfolio that people use for the applications they are developing. While Bitcoin is a digital currency that is processed to replace traditional currencies.

Round2: Ethereum vs Bitcoin: Technology

Bitcoin may not be running on the fastest and best blockchain technology, but it is the first and most famous. Most importantly, Bitcoin is still making huge waves in the Fintech industry and it appears that it is here to stay. 

On the other hand, Ethereum technology is incredibly exciting for developers and countries around the world, and its meant to be facilitating smart contracts and the development of new apps in a decentralized world.  


Moreover, many entities have recognized the importance of Ethereum, such as Microsoft, Intel, and some international banks, in addition to many other institutions that are increasing day by day.

Although there are many notable technical differences between the two, the most significant difference between bitcoin and ether is the purpose and efficiency of the capabilities.

Generally, Etheruem uses are much broader than Bitcoin uses and capabilities, since Ether can be used as a cryptocurrency just like bitcoin. while Bitcoin can only be used as an online cryptocurrency to make payments and trading money online.

Moreover, the blockchain system built into the Etheruem platform focuses on improving performance and running software code for decentralized applications, not only to track transactions just like Bitcoin.

So, is Ethereum better than bitcoin? Well… If you are talking about technology, the answer will be “Yes”. 

Round3: Supply & Market Capitalization of Ether and Bitcoin

Bitcoin has a limited supply, which means that no more BTC coins will be generated by the system after the max supply is reached. Although this varies from project to project, the max supply of Bitcoin is set to 21 million units. 

Unlike Bitcoin, it does follow an inflationary system where there is no set market cap. Instead, about 18 million Ether tokens are released to the public on a yearly basis. There are over 100.8 million ETH tokens in circulation as of this writing.

The Ether supply is unlimited, and the availability of ether is limitless and unaffected by the use of individuals, while the supply of Bitcoin is limited and affected by the coin miners as the Bitcoin manufacturing is supposed to be finished by 2140.

Bitcoin is more liquid in the sense that it’s meant to be traded for goods and services. With its coin market cap at 21 million, this can create a sense of scarcity that may drive the value of Bitcoin up. There are only 17.97 million BTC coins in circulation as of this writing.

Interestingly enough, in Jan 2017 the competition between Ethereum and Bitcoin on cryptocurrencies market share peaked as Ether market cap reached 31.5% of cryptocurrency market cap while bitcoin was only 39%.

However, at this time Bitcoin has 66% of the cryptocurrencies market cap and Ethereum comes in second with a shy 10% of the cryptocurrencies market cap according to CoinMarketCap data.

Round4:  Ethereum vs Bitcoin: Price History

On the downside, Ethereum currently doesn’t have as much market value compared to Bitcoin, and right now it’s only valued at less than $200 per ether compared to the 8 thousand dollars per Bitcoin - that might be changing in the future.

Current bitcoin price chart: 

bitcoin price chart.png

But the interesting point is; BTC was valued at less than $1 in 2010, since then it goes exponentially and caught everyone's eye when it reached an all-time high of around $ 20,000 at the end of 2017, as the mainstream media buzzed with bitcoin news.

However, the second-largest cryptocurrency "Ether", issued in August 2015 was worth about $ 2.8 and has since grown steadily to reach its all-time high at $1100 in Jan 2018.  But in 2019, bitcoin and Ethereum both drop down from the highest price.

Current ethereum price chart: 

ether price chart.png


The key difference If we compare Bitcoin and Ethereum at historical prices is; BTC price is more stable than Ether price.

Round5:  Mining and Transaction of Ethereum vs Bitcoin

Although Bitcoin and Ethereum charge fewer transaction costs, Bitcoin and Ethereum still charge transactions in different ways. 


Ethereum trades are faster: Bitcoin exchange takes up to 10 minutes to complete the trade, while Ethereum is completed within 15 seconds.

Bitcoin imposes limits on the size of a physical block that contains several information including production, transmitted movements, and the length of block production (equal to 10 minutes).

For the ether, the size of the block depends on the information inside it, while the block production period is 3 seconds. In other words, ether has the ability to accept any information that is incorporated into the blockchain of the Ethereum platform.

More than two-thirds of all the available BTC coins have been mined and the rest is choosing the early miners whereas around 50% of Ether tokens have been mined.

Ethereum vs Bitcoin: Which Is The Most Valuable?

At first, you should remember that the purposes of both Bitcoin and Ethereum are completely different, although they are both still cryptocurrencies.


While Bitcoin was the first cryptocurrency ever created, naturally, it's the most famous and has been made much more of the investment.


Ethereum, on the other hand, was more interested in developing great technology, and the adoption of its technology is increasing day by day from various institutions.


The short answer is that they are both successful and worth investing in, each has its own distinctive features.

Should I invest or mine Ethereum and Bitcoin?

Investing in both Ether and BTC may be very profitable, but you should take care of price fluctuations. As the cryptocurrencies prices are subject to supply and demand terms. Also, you should follow proper investment rules.


While mining is an essential process for Bitcoin and Ethereum as well, contributing to maintaining transactions by the participation of numerous miners who are using their computing power to validate these transactions.


In contrast, they receive a return through this cryptocurrency. Moreover, miners often participate in mining in order to contribute to technology growth or investing beyond trading.


If you are planning to mine Ethereum or Bitcoin, you should be aware of 2 things:


Mining is no longer an individual effort that can be done on a personal computer. These days, mining requires many computing machines designed especially for mining to do it effectively plus steady electricity.


Use a Bitcoin calculator or Ethereum calculator to estimate whether contributing to mining will give you the returns you want and if it is worth your time. It’s recommended that you join a pool of miners who all contribute resources to run a successful mining operation.

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Ethereum and Bitcoin were not made to compete with each other, because they have different goals. Moreover, there are huge advantages and caveats held by both Bitcoin and Ethereum when it comes to earning extra money in the world of cryptocurrency.


If you are still asking which is better to invest in?

Well… keep in mind that Bitcoin as the first of its kind, so it still leaves a strong impression on the finance industry making it easier to use as a buy, sell, and trade currency.


While Ethereum comes with great technology and its development potential going largely. As it has succeeded in getting acceptance of various institutions and may look a good chance that Ethereum will be the next big thing to invest in.


Ultimately, the clear winner of this comparison is YOU, the savvy and well-read potential investor who’s open to both options. 

If you’re still hesitant between them, why don't put both in your investment portfolio!

* The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

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