Bitcoin vs Ethereum Vs Tether Which is Better and Why?
Cryptocurrency has been the talk of the town ever since the early months of 2020. In the beginning, most of the headlines were grabbed thanks to the market reports by credible financial institutions such as Goldman Sachs that put trust in the legitimacy of the major cryptocurrencies such as Bitcoin and Ethereum. Then, as the stock markets worldwide crashed, the crypto market saw tremendous gains, with many coins hitting All-time-High (ATH).
Today, many businesses accept Bitcoin as a mode of currency, and this is helping bring in new investors who may not fully understand the difference between Bitcoin, Ethereum, Tether and why some coins are considered as “stable” when compared to others.
Difference between Tether, Bitcoin and Ethereum
Bitcoin, Ethereum and Tether use blockchain technology, but there is a significant ideological difference between Bitcoin, Etheterum, and Tether.
Tether or USDT is one of the few “stable” coins and has been around since the early months of 2014! The main difference between Tether and cryptocurrencies such as Bitcoin and Ether is that, unlike the unstable coins, USDT is backed by a 1:1 ratio of the U.S. Dollar and managed by a single company, Tether Limited. Till today, the management has not proven the claim that an equivalent amount of USD backs every USDT coin. Despite the criticism, Tether has become one of the most popular coins today.
Disadvantages of Tether
Fewer Pair-Trading Options – One of the biggest cons of USDT is that you cannot trade them on every popular trading platform. This limits the pairing trades, and with hundreds of coins in the market, you can only use 18 to 24 trade pairs using USDT.
No Decentralization – Many traders have heavily criticised USDT coins as many ardent crypto-traders do not believe it is genuinely transparent. It does not follow the decentralisation adopted by Bitcoin and Ether. A single Company owns the coin – Tether Limited and thus goes against the morals of a decentralised financial system that other coins follow.
Created in 2009 by Satoshi Nakamoto, Bitcoin is the most popular and the first-ever decentralised electronic, peer-to-peer currency. As a result, Bitcoin is the most prized cryptocurrency today. It started the revolution in finance and kick-started the need for currencies that were not controlled by traditional agencies such as the Government or Banks. Bitcoin works using encryption techniques that enable people to send and receive money. Earlier in 2021, Bitcoin reached an ATH crossing the hurdle of $63,000.
The main advantage of Bitcoin (BTC) is that it is decentralised and offers complete transparency to every trader and investor. Moreover, being the most popular cryptocurrency, it can also pair with altcoins such as Ether.
Disadvantages of Bitcoin
High Volatility – Apart from being one of the most popular coins, BTC is also highly volatile. Traders can earn and get rich when the price is going up, but when it starts going down, the price of Bitcoin can come down crashing fast, thereby leading to huge losses if not appropriately monitored.
Launched in 2015 by Canadian-Russian programmer – Vitalik Buterin, Ethereum is a currency that provides Ether token and is used by users to create decentralised applications. It is the second most popular cryptocurrency and has gained massive backing from investors due to the bright future of technology and Ethereums application in the world of creating smart contracts. In 2021, ETH reached an all-time high of more than $4000/ETH coin taking its market cap to record highs, just behind Bitcoin.
The main advantage of trading or investing in ETH in 2021 is that the upside is a lot compared to other altcoins. Today, ETH is trading within the range of $2200-2500 and many traders believe that there is a strong possibility that ETH will reach $10,000 by 2025. However, since Ether is also an unstable coin, there is a lot of volatility involved and when Bitcoins prices crash, many altcoins, including ETH, also tend to drop in value.
There is no clear answer to which is better: Bitcoin, Ethereum or Tether. The trader and investor have to decide which cryptocurrency is best depending on the risk appetite and the trust in the coins.