# Will Ethereum Overtake Bitcoin?
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2018-03-03
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: Bitcoin vs Ethereum: Is it Time for Ethereum to Overtake?
Meta Description: Discover the key disparities between Ethereum and Bitcoin, and why Ethereum may be positioned to surpass Bitcoin in the cryptocurrency market. Learn more here!
URL: https://financedigest.com/will-ethereum-overtake-bitcoinhtml

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by **Richard Tall**

As a lawyer working in financial services, I spend plenty of time talking to clients with cryptocurrency trading businesses – and every day the list of “currencies” these kinds of firms trade in seems to grow, almost exponentially.

It really hits home just how many cryptocurrencies there are when you consider that in the last four years, humankind has invented seven times more of these “currencies” than the governmental currencies that already existed.  The two most famous of these, which most people have heard of by now, are [Ether – the token associated with Ethereum- and Bitcoin](https://www.financedigest.com/cryptoverse-ether-snaps-at-bitcoins-heels-in-race-for-crypto-crown.html "Cryptoverse: Ether snaps at bitcoin’s heels in race for crypto crown").

There is no doubt that for now, Bitcoin [remains ahead](https://www.financedigest.com/swiss-watchmakers-remain-upbeat-ahead-of-geneva-gathering.html "Swiss watchmakers remain upbeat ahead of Geneva gathering") of Ethereum, but with its recent drop in value, many have started questioning its supremacy. Could this be the time for Ethereum to overtake Bitcoin?

**There are key disparities between Ethereum and Bitcoin**

Before we dive deeper, it’s important to note that in reality, Bitcoin and Ethereum are quite different.

Technically, there are no limits to the use of Bitcoin. While it settles in a way different to [dollars or pounds](https://www.financedigest.com/u-s-dollar-struggles-pound-hits-one-year-high.html "U.S. dollar struggles, pound hits one-year high"), it essentially does the same thing – which isn’t much when you think about it. Money exists and it sits in our [bank accounts](https://www.financedigest.com/now-is-the-time-for-banks-to-introduce-intelligent-account-analysis.html "Now Is the Time for Banks to Introduce Intelligent Account Analysis").  It may enable us to do things but in itself, it does not undertake any activity. Regardless, Bitcoin is abundant.  It has become mainstream, can be used as a means of payment in a number of different arenas and is part of common parlance.

Ethereum is a [computing platform which provides scripting language for smart](https://www.financedigest.com/sales-of-smart-antenna-to-rise-at-8-5-cagr-through-2031-digital-transformation-of-vehicles-computers-factories-fuels-market-growth-tmr.html "Sales of Smart Antenna to Rise at 8.5% CAGR through 2031, Digital Transformation of Vehicles, Computers, Factories Fuels Market Growth: TMR") contracts.  This means that there is a blockchain upon which a number of contracts can be written and automatically executed should a set series of events occur. As with most blockchains, Ethereum is [open source](https://www.financedigest.com/why-should-investors-be-paying-more-attention-to-open-source-software.html "Why should investors be paying more attention to open source software?"), which means that anyone minded to do so can use it to write and implement smart contracts, which are simply a series of promises in digital form.

Ether is the unit of value deployed on the Ethereum blockchain, and consequently it shares certain characteristics with Bitcoin. It is a [potential](https://www.financedigest.com/the-potential-impact-of-coronavirus-covid-19-for-riveting-tools-market-revenue-opportunity-forecast-and-value-chain-2021-2028.html "The Potential Impact Of Coronavirus (Covid-19) For Riveting Tools Market Revenue, Opportunity, Forecast And Value Chain 2021-2028") store of value and is fungible between persons who perceive it to have a value.

**The [value of the cryptocurrency market](https://www.financedigest.com/analgesics-market-value-surpasses-us-77-3-bn-as-demand-for-nsaids-rise-at-4-1-fmi.html "Analgesics Market Value Surpasses US$ 77.3 Bn as Demand for NSAID’s Rise at 4.1%: FMI") means nothing**

All of the [major cryptocurrencies have trended](https://www.financedigest.com/refurbished-medical-imaging-equipment-market-comprehensive-study-with-key-trends-major-drivers-and-challenges-2018-2026.html "Refurbished Medical Imaging Equipment Market: Comprehensive Study with Key Trends, Major Drivers and Challenges 2018-2026") in much the same way, albeit they do different things.  [Ether’s market](https://www.financedigest.com/propylene-glycol-methyl-ether-acetate-market-to-reach-us-618-mn-by-2030.html "Propylene Glycol Methyl Ether Acetate Market To Reach Us$ 618 Mn By 2030") cap today is about $84 billion and Bitcoin’s is about $174 billion. However, there is little point in trying to ascribe reasons to the differing levels of value though, as a market-driven by those [seeking to get rich quick is no real market](https://www.financedigest.com/anti-static-foam-packaging-market-booming-segments-investors-seeking-growth-2030.html "Anti-static Foam Packaging Market Booming Segments; Investors Seeking Growth 2030") at all.

Ethereum’s perceived threat to Bitcoin is not a simple comparison of relative worth, then.  There are essential differences to what each does and as the [market continues](https://www.financedigest.com/welding-consumables-market-continue-to-be-largest-product-segment-in-consumer-market.html "Welding Consumables Market Continue to be Largest Product Segment in Consumer Market") to mature the value of both Bitcoin and Ether will be driven by new factors to those that currently exist.

In recent times we have seen this happen, with the [market capitalisation of all cryptocurrencies taking a bit](https://www.financedigest.com/the-surgical-drill-bits-market-to-have-growth-devised-on-innovation.html "The Surgical Drill Bits Market to have growth devised on innovation") of a hammering. This has been due to UK mortgage companies refusing to accept [funds generated from certain cryptocurrencies as deposits for properties](https://www.financedigest.com/some-uk-property-funds-defer-investor-withdrawals.html "Some UK property funds defer investor withdrawals"), to concerns about further governmental bans in jurisdictions across the globe.

**Ethereum has benefits beyond that of a cryptocurrency**

Ether is simply a product of Ethereum.  Ethereum is actually a huge [computing network](https://www.financedigest.com/hackers-hit-italian-oil-company-enis-computer-networks.html "Hackers hit Italian oil company Eni’s computer networks") which enables anybody to build a decentralized application.  A business, if it decided that it needed a blockchain developed solution, could [employ a programmer to build that on the Ethereum platform](https://www.financedigest.com/matchly-the-us-fintech-platform-that-enables-employees-to-access-their-401k-employer-match-raises-1-7m-in-pre-seed-round.html "Matchly, the US fintech platform that enables employees to access their 401(k) employer match, raises .7m in Pre-Seed Round").

Ether, while associated with the Ethereum platform, is capable of performing the same function as Bitcoin.  Whether or not it does so is simply a [factor of the parties to any transaction determining](https://www.financedigest.com/factors-that-determine-a-successful-rental-property-investment.html "Factors that Determine a Successful Rental Property Investment") whether or not Ether has any value to them.

As we have seen, governments are beginning to put restrictions on cryptocurrencies, concerned that their citizens are speculating on something which their governments perceive they do not understand. While this could impact Ether, Ethereum wouldn’t be affected. If governments put restrictions on cryptocurrencies including Ether, [businesses will still be able to use the Ethereum platform for things](https://www.financedigest.com/taking-the-leap-at-50-five-things-i-learnt-from-starting-my-own-business-at-50.html "Taking the leap at 50 – Five things I learnt from starting my own business at 50") such as payment services, which banks and many other entities are doing already.

The biggest threat to Bitcoin remains Bitcoin itself, with the continuing creep of [government regulation and the ongoing tag of financial crime driving market](https://www.financedigest.com/industrial-automation-incentives-by-governments-in-emerging-economies-drive-industrial-robots-market-fmi-study.html "Industrial Automation Incentives by Governments in Emerging Economies Drive Industrial Robots Market: FMI Study") behaviours.Ether has the advantage of being associated with Ethereum, and Ethereum does what Bitcoin cannot do, and came to be because of the limitations and single function of Bitcoin. Despite this, while Ether is clearly a competitor to Bitcoin, bearing in mind that the [combined](https://www.financedigest.com/the-combination-antibody-therapy-market-to-grow-on-a-satisfactory-note.html "The Combination Antibody Therapy Market to grow on a satisfactory note") market capitalisation of both is way south of the market capitalisation of some of the world’s biggest companies, there is room for both at present, and for now, Ethereum won’t “overtake” Bitcoin.


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