Why Ethereum Is a Better Long-Term Buy Than Bitcoin The Motley Fool

This eclipsed the returns of even risky, high-growth tech stocks by 10 times. While past returns are certainly no guarantee of future returns , this type of historical track record is certainly enticing. Ethereum enables building and deploying smart contracts and decentralized applications without downtime, fraud, control, or interference from a third party. The number of bitcoins eventually tops out at 21 million in the year 2140. A new block of bitcoins takes roughly 10 minutes to become part of the blockchain.

Ether could be decreed by the developers as finite tomorrow, but at any later point, the same cabal might reverse this policy, as they have in the past. Looking into 2023, a strong case can be made that Ethereum can outperform Bitcoin. Still, I advise holding both, as I see these cryptocurrencies as complementary. And of course, tokens needed for Ethereum scaling should also perform well if/when Ethereum rallies. You can still benefit if the market moves in your favour, or make a loss if it moves against you.

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Bitcoin first hit the $20,000 mark on 17 December 2017, which fuelled an altcoin rally that lifted prices to fresh highs in January 2018. This major rally put a spotlight on the cryptocurrency industry and prompted an increase in traders and investors entering the markets in an attempt to generate profits from the high price volatility. Blockchain networks like ethereum or bitcoin do not require an intermediary to process transactions, unlike the traditional system that uses banks as intermediaries to facilitate transactions. The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.

• If a user can only connect to malicious nodes who refuse to relay their transaction, the user will be unable to have their transaction confirmed.
• As far as the value goes, the upgrade has made Ethereum’s foundations in the crypto market even stronger.
• For Bitcoin to become the global reserve money, additional infrastructure is needed to enable more, faster, and cheaper payments.
• Ethereum is a decentralized platform to host decentralized applications.

However, unlike traditional fiat currencies such as the US dollar, it is based on a decentralized network, which means that it is not controlled by any government or financial institution. Bitcoin improves upon gold by offering increased portability; unlike physical gold, which has to be mined from the earth and transported to markets, Bitcoin can be easily transferred over the internet. This consensus mechanism asks participants to stake their own money for the chance to validate transactions and add a block to a blockchain, rather than carry out complex computations. However, because Ethereum has more use cases than Bitcoin and serves a larger purpose, we may claim that it is an overall better Bitcoin alternative. However, it is evident from Ethereum’s premise that it is not intended to be a Bitcoin substitute. However, if there were only room for one, Ethereum would almost certainly dominate the market because it provides both smart contracts and a store of wealth.

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Although the current Bitcoin price is lower than its ATH for 2021, it has still grown by 300% in the entire year. The growth rate for Ethereum has also been marvellous with a rise in prices by 900% despite the massive downturn both these top cryptos have suffered. This first zone would be the tougher one to beat for bulls in the market. Ethereum’s latest update, London Hard Fork was implemented to reduce the high transaction fees and enhance its scalability.

If 2017 was all about which currency gained more, 2018 is more about which one lost more. Naturally, one of the things that the public is mostly concerned with, especially when it comes to cryptocurrency investing, is pricing. BTC vs ETH has historically been an interesting match to watch, but Bitcoin has definitely managed to outperform Ethereum substantially. The idea of Ethereum’s platform was conceived by Vitalik Buterin – a programmer from Toronto, Canada.

We are confident of our failsafe approach and want to share it with the world by providing each human with their own Worldcoin for free. However, some claim Bitcoin is “more” decentralized than Ethereum, primarily owing to the DAO hack on Ethereum’s blockchain in 2016. Bitcoin http://fitnesland.ru/pilates.htm supporters will argue all this extra functionality is superfluous and dilutes the true innovation of better money. They argue these “bells and whistles” compromise the integrity of the blockchain. Ethereum supporters argue that these additional functionalities are necissary.

The Motley Fool has positions in and recommends Bitcoin and Ethereum. Bitcoin’s long reign as the most popular crypto to hold in your portfolio may be coming to an end. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. The Motley Fool has positions in and recommends Avalanche, Bitcoin, Coinbase Global, Ethereum, and Solana. Investopedia requires writers to use primary sources to support their work.

With proof of work, miners around the world try to solve a complicated mathematical puzzle to be the first one to add a block to the blockchain. Ethereum, however, is working on moving to a different form of transaction validation known as proof of stake. With proof of stake, a person can mine or validate transactions in a block based on how many coins he owns. Bitcoin has the edge over Ethereum and other cryptocurrencies in part because it was the first one to use blockchain technology. Having been in business for more than 9 years, it is seen as a more stable coin something that continues to work to its advantage among investors. Market capitalization, or market cap, is a metric used to assess how popular or valuable a cryptocurrency is on the crypto market.

Bitcoin’s impressive historical returns, combined with its deep liquidity and potential to power the future of online payments, makes it an attractive long-term investment target. As measured by market capitalization, Bitcoin and Ethereum now account for an astounding 60% of the total crypto market. As of Aug. 30, 2022, Bitcoin had a market cap of $376.5 billion, accounting for about 39.6% of the total cryptocurrency market, which was valued at just over $954.3 billion.