The concept of cryptocurrency has significantly changed how tech-savvy investors have increased their wealth and reached financial success. Ten years ago, people would buy cryptocurrency either as a joke or to pay for online purchases because of how cheap it was. Not many people anticipated its massive growth in just ten years.
One famous incident of using Bitcoin to buy something as insignificant as a pizza was when Laszlo Hanyecz used 10,000 units of bitcoin to pay for them at his local Papa John’s. The 10,000 units of bitcoin may have been worth $41 in 2010, but now it’s worth almost $20,000. What started as a joke became one of the most extensive financial losses in Laszlo’s life.
This significant jump in the value of bitcoin created a surge of people trying to invest without prior knowledge of how it works. These are even caused by several bitcoin scams that target vulnerable people who knew nothing about bitcoin investing but were promised a large sum of money if they invested. The cost of bitcoin may crash, and many people consider it very risky to try. However, its steady growth over the past few years has continued encouraging investors to try their luck and place their money in bitcoin.
Many people have shared their success stories about participating in cryptocurrencies. To explain cryptocurrency growth, in 2011, the price of trading Bitcoin was $3.50. It was significantly cheaper, and people didn’t pay attention to it because the idea was too complex, especially for those unfamiliar with crypto trading. Fast forward ten years to 2021, trading Bitcoin costs $60,000.
In many cases, some people, most of those who had Bitcoin during this time, we’re tempted to sell their crypto stocks when it started to peak at a price from hundreds to thousands. Those who are adventurous enough and waited to invest in Bitcoin over the years and have held on to it are now millionaires.
Javed has no plans of becoming a bitcoin investor. He didn’t buy bitcoin to let it grow. Initially, Javed used bitcoin to wire money because it was more convenient than the traditional method. At some point in 2018, he left some in his online wallet, and the prices started increasing. He was profiting, and in 2020, he was able to buy a Bentley while living in Dubai.
Heather has been quietly investing in cryptocurrency with an initial investment of £5. It was a low price to pay for something that would grow exponentially. She held on to her investments and kept faith in them whether the value rose or crashed. Heather plans to use these funds to have a comfortable retirement. She knows that many people have used their bitcoin payouts to pay for extravagant things, but for Heather, she wants to secure her future.
Bitcoin Vs. Ethereum
If you’re a beginner amazed by all these success stories, you’re probably wondering how to invest in bitcoin. The promise of turning your thousands into millions seems untrue, but it is true if you know how to do it. The first thing you must anticipate is that it’s not easy and it’s a gamble. You don’t just purchase bitcoin online and wait for it to grow, as many people are misled on thinking. You have to be updated with the rise and fall of the value, know when to sell and keep, and so much more. You have a lot of cryptocurrency choices to choose from, but let’s focus on the top two: Bitcoin and Ethereum.
In 2009, a developer known under the alias Satoshi Nakamoto developed Bitcoin. According to them, this was their answer to the worldwide financial problem in 2008. Bitcoin was designed to be a decentralized worldwide digital money that online payment processing could utilize. Aside from its intended purpose, bitcoin became more popular among investors as a type of ‘digital gold’ that may be used as a store of wealth. It was meant to store money online, and many used it to wait for the digital currency to rise.
On the other hand, Ethereum was one of the first bitcoin alternatives founded in 2015. Vitalik Buterin and eight other people created this company and are still involved. Many consider Ethereum as only the second to Bitcoin in terms of development, purpose, and value.
So which one is a better investment? The answer largely depends on your ability to assess risks and financial objectives. The two have distinct characteristics and goals, with bitcoin aiming to become a worldwide currency, and Ethereum serves to develop modern funding systems. Both Bitcoin and Ethereum have excellent growth potential but in different ways. Because of their different purposes, it is much better to consider what you’ll be using to see which one fits your needs rather than wondering which one is more profitable.
Every four years, the block incentives for miners are divided in half, and the total number of coins that may be minted is restricted to 21 million. It generates a shortage, which is anticipated to keep the price stable. In circulation, there are about 18.8 million BTC, with 50% projected to decrease the generation of new coins until the cap is reached in 2140.
Although Ether doesn’t have a set production cap, coin burning will likely lower production as blockchain use develops. According to Etherchain statistics, there are approximately 117.6 million ETH tokens in operation, with over 351,291 units burnt as of April 2022.
Although there is a mistaken belief that Bitcoin and Ethereum are rivals, the discussion would lead to one development’s collapse. This idea couldn’t be any further from the actual case. The bottom line is that these two have different distinct aims and outcomes. They both have the potential for improvement. Alternatively, they also both have the probability to lose value if virtual currencies undergo a market downturn.
Experts warn that even though investing in cryptocurrencies looks inviting and exciting, they should also anticipate its downsides. It would help if you researched extensively to understand the benefits and risks of investing in cryptocurrencies. If you’re preparing to make big money with bitcoins, you should also be prepared to lose so that you’re ready for both outcomes.
Whether you’re investing in Bitcoin or Ethereum, or even both, it is essential to get to know them properly and understand their specific purposes.