BTC or ETH: Which is The Better Long-term Investment?

Bitcoin (BTC) is a decentralized and open-source digital currency for transactions and exchange via blockchain technology.

Ethereum is also a decentralized digital platform for transactions and other online functions, with Ether's currency (ETH).

Bitcoin possesses the highest market cap, followed by Ethereum.

Both currencies have several similarities and are worth investing in.

Blockchain is the sophisticated and versatile technology that enables you to authenticate and make transactions using your digital asset. Blockchain powers currencies like Bitcoin and Ethereum on a central platform.

At this juncture, it is essential to look at what BTC and ETH are.

What is BTC?

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Bitcoin is a digital currency that utilizes cryptography. Bitcoin is a fungible digital asset that you can use to make and receive payment. It has a secure storage and transmission system that enables you to store your BTC on your blockchain wallet.

Bitcoin currently retains the number one cryptocurrency with the highest market capitalization. A single unit of Bitcoin now stands at $44,119.30 on the blockchain network.

What is ETH?

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ETH is the abbreviation for Ether, a token for transactions on the ethereum blockchain.

Ethereum is one decentralized digital currency that allows transactions over the blockchain network.

Ethereum is an open-source blockchain platform that runs anonymously and independently.

This digital currency was first conceived in 2013 by Vitalik Buterin. Other members of his team include Gavin Wood, Joseph Lubin, Anthony Di Lorio, and Charles Hoskinson.

By July 2015, all arrangements were in place, and the Ethereum platform went live. Since then, it has continued to upgrade from proof of work mechanism to proof of stake. An Ethereum, 1ETH, currently exchanges $3,112.2 on the blockchain network.

Similarities between BTC and ETH

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This is a list of similarities between Bitcoin and Ethereum.

Bitcoin (BTC) is the number one digital asset on the blockchain network, followed by Ether (eth).

Both cryptocurrency units are fungible, and they can be used to make and receive payments. Via a P2P payment system, you can convert them into paper money and transfer it into your traditional bank account.

Ethereum and Bitcoin tokens are decentralized, and they are both not under government regulation or controlled by any country's central bank.

The rise and fall of the market price of both digital assets are determined by the market forces, not by a government or institution.

Transactions on ethereum and Bitcoin are conducted via a distributed ledger technology known as the blockchain.

At the moment, both ethereum and Bitcoin use a consensus protocol called proof-of-work mechanism. The proof-of-work mechanism allows the nodes of the mining networks to agree on all transaction information.

The mechanism helps prevent the attack of your wallet and transaction details stored on the blockchain network.

Albeit, it is expected that by 2022, Ethereum will be launching its complete upgrade that will see the digital currency move to the Proof-of-stake mechanism.

The similarities give a close comparison of both digital currencies. A closer look will enable us to identify better long-term consistency and should be invested in.

BTC or ETH: which is a better long-term investment?

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To understand which of the two cryptocurrencies is a better long-term investment, one must consider some essential metrics and statistics before coming to a logical conclusion. These metrics include;

Market capitalization
As of November 29, 2021, Bitcoin had a market cap of $1. 08 trillion and accounts for over 48% of the entire digital currency market. These statistics show that Bitcoin is unarguably number one and has the most significant cryptocurrency market share.

At the same period (November 2021), there were a total of 18,886,912 BTC units in circulation, all totaling over $2.25 trillion.

Ethereum, during the same period, puts its market cap at $528 billion and accounts for 23.4% of the cryptocurrency market share. During that period in review, there were 118,545,259 units of ETH in circulation.

The statistics above showed fewer Bitcoin in circulation compared to the Ether. However, the market cap of BTC far outnumbers that of ETH.

Gas/transaction fee
Ethereum based transactions are faster on the blockchain network than transactions involving Bitcoin. However, the faster transaction automatically translates to a high gas fee. The gas fee charged during cryptocurrency transactions is used to compensate those involved in the transaction.

It is a widespread belief that the high gas fee results from the high network that the ethereum transactions consume. And it is this same high network that makes it a faster transaction.

Those who make fewer transactions pay more gas fees than those who make large transactions. For instance, an online user said, “..... A big deal when looking at ethereum is that someone isn't going to want to pay $35 (in fees) for an item that costs $40.”

So when looking at which of the cryptocurrency is a better long-term investment, you should consider the gas fee. However, there will likely be a reduction in gas fees when the ETH 2 upgrade becomes fully functional.

Their exponential growth
Bitcoin was first traded in 2009 and sold for 1cent. In November 2021, a unit of BTC was worth an all-time high of $69,000 (it has dropped since then).

Ethereum, on the other hand, traded for $3 in market debut in 2015, and by November 2021, it reached a record high of $4,891.

A look at their (individual) performance since its debut shows that ethereum has risen about 1000 times in a record period of seven years. This performance is unique to ethereum alone on blockchain technology.

Conclusion

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The cryptocurrency market that began with Bitcoin in 2009, followed by Ethereum in 2015, now has over 20 different digital currencies that you can transact via blockchain technology.

As investors, while the BTC is regarded as the gold coin and remains the most valuable asset on the digital market, ETH is considered the silver coin and has a lower unit cost.

You can get a unit of ETH at about $3000 while a team of BTC goes for about $40 000. So while both currencies are food for long-term investment, you should consider your worth and the one you can afford to maximize your profit in the long run.



Author: Valentine. A Gate.io Researcher
This article represents only the researcher's views and does not constitute any investment suggestions.
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