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Trading Bitcoin and Ethereum – A Simple Comparison

Trading Bitcoin and Ethereum – A Simple Comparison

By: SMITH THOMPSON

If you have just started research about cryptocurrencies, you already know Bitcoin is number one and Ethereum is right after it. When Bitcoin began getting big, everyone wanted to buy it, not even thinking about other cryptos. Is there a reason to consider other cryptocurrencies at all? Of course, there is!

Here, we will focus on the top two (you can check out the top 10 on the internet very quickly), since there is always an ongoing debate about the two. It’s mostly because one type of traders tend to trade Ethereum, while others prefer Bitcoin. Why, and what’s the catch? We explain here.

The thing about Bitcoin

Bitcoin changed the whole system when it appeared, because all of a sudden we had a currency that can’t be monitored by authorities, it’s digital, and you can’t track it either. Bitcoin’s volatility is exceptionally high, but many people tend to buy and keep it, rather than selling it or even spending it, because they know they should wait for the right time. Bitcoin has a cap, and it’s 21 million. Once that number is reached, it will no longer be mined. That’s why it’s becoming harder and harder to mine it since the algorithm is continually changing, making it harder to crack. Blockchain created a new economy within trading, started using supercomputers, making it expensive to mine, so that’s another reason why everyone wants to own even a piece of it. Bitcoin is still quite controversial because of its history on the dark web and similar, but it changed the world of currency trading. Of course, Bitcoin seems like the main thing you should focus on if you are a beginner, but once you start trading, you will notice a variety of cryptocurrencies. There’s where the choice comes in. It’s up to you to see what suits you better, in the way currencies go up or down. Bitcoin tends to change all the time, while on the other hand, trading Ethereum has its benefits. Ethereum might take more to recover after a crash, but it’s far more stable and has only a yearly limit.

The story behind Ethereum

Ethereum was an idea to transform a micro-economy rather than appearing out of the blue as Bitcoin did. Some of their goals included making a system where everyone could eventually make an app and make their way of making payments. They wanted to create smart contracts which would make far quicker and more comfortable (digital) money transactions. That’s why in 2015 Ether (yes, that’s the actual name of the cryptocurrency – Ethereum is the name of the whole project). Many stood behind it and supported it wholeheartedly. The decentralized blockchain (same as Bitcoin), made payments more straightforward for people around the globe.

Bitcoin vs Ethereum

Although they seem pretty similar, the intention of Bitcoin’s and Ether’s creators is entirely different. To summarize it, Bitcoin was made with a purpose to store and exchange value. At the same time, Ethereum wanted to make an equal space for creating a blockchain, like we said above. as a completely different currency and aspired to be another way to exchange and store value. Dapps (decentralized apps) and smart contracts are the primary goals of project Ethereum. It seems like they still want to make transactions faster and easier for everyone, while Bitcoin tends to become an alternative currency system.

Don’t get it wrong- the two currencies are not competing. Ethereum can be a source of support for the Bitcoin’s network because they also use blockchain. Traders are the ones who made them “compete” since they trust Ether so much. We should mention that Ether is not always the strongest in value like Bitcoin, but it’s still right behind it.

Two ways of trading to explore

The two most popular ways of trading are holding and active trading on the market.

Holding presents a strategy that is very common for Bitcoin traders, despite the rumours among people who are not trading. It’s super practical since you are not bothering with everyday news too much, and you will stay on the market for a long time if that is your goal. Holding means precisely what you can think of – you invested in Bitcoin, for example, and now you keep it in your possession, instead of selling it. You are merely waiting for the right moment, and the same can be applied to Ether. This doesn’t mean you should stop talking to your broker or completely forget to stay informed. You are holding the currency because you want to seize the right moment. Constant fluctuations happen, so stay patient and pay attention to what’s going on.

Active trading is for people who have more experience, and they are regularly informed about changes in the market. That’s why you should decide what method is to you, then see how much people are using active trading for Bitcoin or holding for Ethereum, and then decide which one is the right for you.

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