Until turning to the issue of which cryptocurrency to invest in 2020, let us ask briefly whether anyone will. And against such an undertaking there are several explanations.
Behind a cryptocurrency, there is no’ true’ interest, i.e. no equipment, patents, and property, as with a stock firm. This problem affects all traditional currencies as well. If people lose confidence in the euro, a bill of € 100 will ultimately be nothing other than paper.
The euro is less volatile than Bitcoin and other cryptocurrencies. There is a major risk that over 95 percent of the Bitcoins are owned by only about 4 percent of users. Therefore, these companies have enormous market strength. We are careful not to let the currency fall too hard, but in situations, we might also take heavy losses to protect their earnings before they are eaten up by another price drop.
Bitcoin and other Altcoins still have a big potential for growth in 2020, particularly in recent weeks when Bitcoin increased from $5200 to $7200. The bear market is over, the bears are over.
Bitcoin And It’s Potential
Did you know?
You would have tokens worth about €1,025,556,33 if you had invested €100 in cryptocurrencies such as bitcoin in 2010.
Why Were Bitcoins Invented?
Since the Internet was invented in the 1990s, access to this medium has increased considerably. The door to the virtual world is open and therefore a global trade. Global trade in various currencies makes payment transactions more complicated, as often high costs and several days of processing are not unusual.
Such doubts are a thing of the past with Bitcoins. With the virtual currency, a transaction can be sent from Germany to Japan for an incredibly low fee within a few minutes. There is no need for intermediaries such as banks and government, but can be sent directly to another person’s destination address from a wallet (the “virtual purse”).
The downside, of course, is that there should be an Internet connection, whether it is supplied via the laptop, tablet or mobile telephone. Also, cryptocurrencies are popular hacker attacks. In news, it was not rare to read that major exchanges such as Coinbase or Poloniex had robbed substantial amounts of money. This makes a hardware wallet all the more relevant. It ensures that you have the current account balance on your USB stick or another storage device with your passwords.
The acceptance of Bitcoin increases
Regardless of the extent to which the Bitcoin shoots in the next running: the still huge market capitalization of the coin of over EUR 60 billion speaks for itself. The investor base will not say farewell to Bitcoin as quickly as possible. Many people continue to believe that the Bitcoin Market still has its potential and that the market is still in its early stages.
The many optimistic signs also account for price rises that the press has pulled in the past few weeks and months: the popularity of cryptocurrencies is on the rising— also with the regulatory authorities. Bitcoin Trusts are no longer a rare occurrence. The next price increase is undoubtedly inevitable.
The Not So Silent Competitor – Ethereum
Ethereum can do more while Bitcoin is a pure cryptocurrency. Ethereum intends to replace its technology with third parties that store our data. The goal of Ethereum is to decentralize our data.
Here is an example: Some of us can work together on projects using online document services or online work platforms. Others store their information in Microsoft or Apple cloud, such as photos, insurance letters, invoices, etc. Consequently, we transfer our data to third parties and trust data protection and data integrity.
It can not be checked by us whether this is assured. The dream of Ethereum is that the same features that Google, Apple, and Facebook deliver to us, the data owners, will be built by modern distributed applications based on Ethereum Technology. None other than the owner may access or change the data. More on this and later on the technical background.
Ethereum — The Technology Of The Future?
For many, Ethereum is Bitcoin’s successor. This can be seen, for example, in that the market value is already approximately half (currently) of Bitcoin. It is difficult to predict whether and when the bitcoin can be overhauled and the so-called “flipping” accomplished. From our viewpoint, Ethereum provides technology that will be innovative in the future. Nevertheless, Ethereum and Ether are still in a relatively early phase of development. So some significant challenges still have to be overcome before stability is achieved, similar to that of Bitcoin.
As the number of Ethereum-based applications increases, there is a question of what happens in badly programmed intelligent contracts that interrupt or, worse still, block the network. How does the virtual machine from Ethereum do this? Manual control is not necessary because of the autonomous leitmotif. It undermines the essence of the unchangeable blockchain.
Another issue that has not yet been settled in the total number of tokens. Bitcoins are limited to no more than 21 million tokens. Here, nothing is going to change. With the ether, though, the number of tokens is still uncertain. There are currently over 80 million tokens, of which 72 million have been generated at Genesis crowd sales. Also, the’ Difficulty Bomb’ is just beginning to take effect, which is supposed to prevent inflation. The higher the computing power of the network, the harder the cryptographic computational tasks the miners have to perform. It remains to be seen whether the complexity bomb of the “works” of the Ether or whether the stagnation too much decreases production (due to a lack of financial incentives for miners).
Scalability has also arisen as a result of the rapid growth of the ether. The Ethereum network must, therefore, cope with the rapidly growing number of users. The previous day, June 20, 2017, over 300,000 ether transactions, a record for the only two-year-old cryptocurrency, were carried out.
For all open questions: Ethereum is only at the start in its second of four phases and therefore has a huge potential for development. It has the opportunity to become the future programmable capital. Nevertheless, the tasks mentioned above must be solved for this reason. There is also a need for good solidarity in the group, which must embrace the changes that must be introduced. In any case, the potential is there.
How Different Is Bitcoin From Ethereum?
Unlike most people, I don’t think that bitcoin and Ethereum are rivals. At most, they only share one element, and both are built with blockchain technology. But that’s it. That’s it. Everything else is different from there. In my opinion, they are the same and compete, Exxon Mobil is the same as Netflix, or they compete because they are both companies. It just doesn’t work that way.
Companies come in all sorts of shapes and sizes, target different customers and function in various markets. For example, Airbnb follows the hotel industry, Uber disrupts taxis, Amazon retails and bitcoin disrupts cash.
I believe that bitcoin’s limited supply, supply-and-demand economics, and massive decentralization make it the absolute king of all the payment systems and other forms of money that exist on the globe nowadays, including fiat currencies like the US dollars and euros, precious metals such as gold or silver, etc.
So if bitcoin prevents transfers, what is interrupting Ethereum? Ethera disrupts legal agreements in its simplest form–items that we use today to buy in together from people, associations, courts, and even government institutions. This is because Etherium was constructed with a different set of properties, especially because it is a programmable blockchain. This essentially means that you or I can write intelligent contracts and build on Ethereum. It involves anything from placing the last will on Ethereum to creating a decentralized Twitter or even gathering these sweet and rare little cats, kitties of crypto.
The programmable functionality of Ethereum, combined with its large community and talented developers, makes it the king of the programmable blockchain such as NEO, EOS, and TRON.
This differentiation in properties distinguishes bitcoin and Ethereum. Bitcoin is the best in payments class and is a store of value while Ethereum is best suited to programming, extending and creating things on top of it.
A wise man once said, “Think of bitcoin like a tiger and ethereal like a shark.” Of course, if you take a tiger and bring it into the water, the shark would win the fight with ease. But if you took it and pulled it onto the grass, the tiger would easily win the fight. But when you sit back and allow the tiger and the shark both to live in their natural environment, you realize that they never really come together and that they both win.
Similarly, in 2020, both bitcoin and Ethereum will continue to dominate their respective markets and grow in scale over the long term. If you’re looking to invest in cryptography by 2020, then the problem shouldn’t be who you should buy, but how much each of them you should buy. At the end of the day, you will have a budget to deviate from all your savings.
In 2020, Which One To Invest?
In my opinion, your risk tolerance is the answer to this question. I think bitcoin’s a safer bet because it’s easier. On top of it, you can’t build objects. While this initially feels like a limitation it simplifies and reduces its scope, allowing it to have a much smaller service than Ethereum. This means that Bitcoin is less receptive to bugs, attacks, hacks, etc. that can wipe the network off overnight.
Although bitcoin has been on the market for more than 10 years and has been used for war, Ethereum has been on the market only for about 4 years. Since Ethereum allows you to build on it, it is much slower, gets obstructed much faster, and the area is much larger, making it more susceptible to bugs and other forms of attack.
Ethereum has a long way to go in solving its scalability problems, and a lot of pain will likely grow as it becomes this global computer to be. As a result, much more risk is baked into Ethereum. But I also think the potential upside in Ethereum is significantly higher because of the potentially endless possibilities of what can be created on it. In my view, Ethereum is more dangerous but potentially has a higher reward.