Bitcoin vs Ethereum: How they differ from each other

Bitcoin and Ethereum have different rules, so are their trading and investment methods also different?

Ethereum has long been known as a strong competitor to Bitcoin, until Andreas Antonopoulos (author of Mastering Bitcoin) claimed that Ethereum is no longer a competitor to Bitcoin, which sparked heated discussions on social networks.

People began to compare the two and discuss the differences between the two digital currencies in investment and trading.

Ethereum’s trading potential

Chris Burniske, analyst and head of blockchain products at ARK Investment Management, said bitcoin is used more as a store of value, while ether, which relies on the Ethereum network to execute smart contracts, is seen more as a trading tool.

Both Bitcoin and Ethereum systems are built on the basis of blockchain, in which transactions are publicly recorded, making currency and asset transactions more convenient and preferential, and eliminating cumbersome middlemen.

In December 2015, the price of Ethereum was less than $1, but now it has risen to $15, a nearly 15倍increase in just six months. This achievement is attributed to Ethereum, whose financial contracts are completely executed by software, which has attracted a large number of users to invest.

With the previous example of Ethereum, the success of DAO (Decentralized Autonomous Organization) is not surprising. This crowdfunding platform supported by Ethereum raised nearly $150 million from more than 10,000 anonymous users. Each participant is given voting rights, they can allocate funds, select projects, and once the invested projects are successful, they can also get a certain degree of dividend rewards.

Ethereum and Bitcoin have different user bases

There are currently 670 Bitcoin ATMs in the world, and tens of thousands of sales points accept Bitcoin payments. Unlike Bitcoin, Ethereum has not yet made its mark in the field of electronic payments. The main use of Ether is currently to support the Ethereum network (such as DAO) to run programs.

David Duccini, Executive Director of the Strength in Numbers Foundation, said:

Users have different expectations for Ethereum than Bitcoin. Both cryptocurrencies can be traded for speculation, but the original function of Ethereum is to support the operation of applications. Therefore, users need enough Ethereum to run their own apps. This is also the problem faced by DAO - unless DAO can continuously generate new Ethereum, the payment platform will face the risk of shutdown.