Since the start of 2017, the Bitcoin vs Ethereum debate has been on every trader’s mind. Arguably, both Bitcoin and Ethereum are the kings of the Cryptocurrency market. There had been multiple instances where Ethereum had made it to the #1 spot on CoinMarketCap, but Bitcoin had ultimately made it out on top. Both coins have their own sets of strengths and weaknesses, but this year it is time for the crypto market to decide which one reigns king.
Bitcoin was created under the anonymous pseudonym, Satoshi Nakamoto. By design, it allows users to store and transfer their wealth without the need for a centralized entity, It was, in part, a reaction to the government influenced financial crash in 2008 (which bailed out the wealthy bankers instead of the citizens). It uses the SHA 256-bit hashing algorithm and each generated address comes with a public and private key. The network is supported by “miners” that use an enormous amount of processing power to solve cryptographic algorithms. These miners also receive fees
Bitcoin has had a long history of price changes. By the end of 2013, it had finally reached the double digits but it had harshly crashed due to the Mt.Gox insolvency scandal. Between 2014 and 2016, the price had been very stagnant and the future of cryptocurrencies in general had been uncertain.
Although Bitcoin Cash and various other software forks are tugging at the heels of Bitcoin, It reached nearly $20,000 at the end of 2017 and is currently sitting at $17,000. There is growing concern about the high transfer fees affecting its longevity, but it may be remedied by the upcoming lightning network and a possible change in the block size.
Pros of Bitcoin:
- Fully decentralized
- High & Steady Price
- Most universally accepted cryptocurrency
- The first currency on the market
- A store of wealth
- Low maximum supply.
Cons of Bitcoin:
- Slower transactions
- Expensive Transaction Fee
- Too many forks on the market
- No smart contracts
Ethereum was launched in 2014 by Vitalik Buterin. This young programmer had been involved in the Bitcoin community and had been involved in other cryptocurrency ventures prior. Ethereum looks more like a development platform rather than a cryptocurrency since it has such a dynamic Smart Contract system. Ether is the base currency that powers the network but it is able to support other user-created currencies on the ERC20 Token Standard.
At the first and second quarter of 2017, Ethereum had experienced its first pump. Although it had peaked over $1,000 in value, it had a series of crashes that kept it dormant for most of the year. It is just now recovering in price and is steadily over $1,000 on most exchanges. At the time of this writing, it is the third-highest cryptocurrency in market capitalization and it is potential to take the #2 or #1 rank.
Pros of Ethereum:
- Cheap transaction fees
- Support for ERC20 Altcoins
- Developer friendly design
- Fast & Cheap Transactions
- Smart contracts
Cons of Ethereum:
- Possible network congestion with the creation of too many ERC20 tokens.
- Smart contracts are prone to human error or scams if used without diligence.
- Higher circulating supply.
The cryptocurrency market is far too young to determine whether Bitcoin, Ethereum, or some other coin in the future will become the dominant force. Ethereum has great potential as developers utilize its application development features and Bitcoin continues to hold strong as the original store of wealth. Both currencies have amazing development teams and holding both coins would be a viable long-term strategy.