Bitcoin futures begin trading on Sunday night, and with the recent run higher in the largest cryptocurrency, investors look to be re-allocating funds to other major cryptocurrency players. For example, Ethereum and Litecoin have seen massive moves in the past week, increasing as much as 70% and more than doubling over a matter of days, respectively.
While nobody actually “owns” Ethereum, the technology is supported and managed by means of a distributed network. This coding platform is necessary to drive the cryptocurrency, providing a pathway for the decentralized applications that run on the system. This is how it is differentiated from Bitcoin. It is through these applications that it runs “smart contracts” which are programmed to be used with the currency. A good analogy that I use sometimes is to think of a vending machine. Put a token in the slot and select the snack you want to buy without the requirement of using a shopkeeper. Upon identifying the payment, the vending machine is then programmed to release the requested snack. Smart contracts not only specify how a transaction is performed, but they also impose those rules using “blockchain” principles. Similarly to Bitcoin or running a bank account, Ether owners hold their funds in virtual accounts that they can transfer to other Ether owners. Each transaction with its “smart contract” also enables the user to transfer any asset without recourse to an agent or intermediary.
Wait … Explain Blockchain
Blockchaining is the process whereby all users of the network monitor and approve the transactions made by all other network users. Every smart contract is stored on every computer on the blockchain network, each of which must confirm any associated transaction arising from it.
In sum, Ethereum is an advancement based on the principle of blockchain that supports Bitcoin but with a purpose that does not directly compete with Bitcoin. However, the popularity and rising market capitalization of Ether bring it in competition with all cryptocurrencies, especially from the trading perspective. On the whole, Bitcoin and Ethereum are different versions of online currency using the blockchain technology, and are set to establish themselves, driven by different intentions.
So which one should I trade?
If the markets are in a free fall you want to be able to profit when everyone else is losing their shirt. The most important thing you need to know is that there are many cryptocurrencies available in the market, with two of the most renowned hitting the headlines on a daily basis – Ethereum and Bitcoin. So all we can say is: Don’t miss out on the Crypto boom and start your free Tradeview demo account and begin trading Bitcoin, Ethereum and Litecoin today!
Account Manager – Tradeview