Bitcoin
Bitcoin is as a digital form of money, which is not regulated by a bank.
Anyone can create an account to buy and sell Bitcoin through websites like Coinbase or others, and the price of bitcoin fluctuates based on supply and demand. Some people are beginning to convert their bitcoin into tokens, which will be issued during an Initial Coin Offering, which allows people to invest in a company by purchasing tokens with their Bitcoin. The supply and demand of those tokens, and their price (just like a share of stock after a company’s Initial Public Offering, or IPO) will also go up or down. These tokens operate on a secondary market, separate from the rise and fall of Bitcoin’s market as a currency.
People buy Bitcoin for many different reasons. Some because they want to store their money somewhere other than a bank. Some because they view Bitcoin as an investment, hoping that its price will increase in the future. And some purchase Bitcoin as a way of investing in companies that raise money through an ICO, since equity in those companies cannot be purchased with traditional currency. You can only purchase tokens with Bitcoin or Ether, which is Ethereum’s cryptocurrency.
Ethereum
Ethereum is another cryptocurrency which some people say could overtake bitcoin as the dominant coin in the market.
Bitcoin is the current leading coin and the price of the other alternative coins is measured against bitcoin, but that could change. Litecoin, for example, is a currency that has its own market and values, however, while Bitcoin is priced at over $3,000 per coin, Litecoin is $45 per coin.
Ethereum stands out because of its technology and its coin values, called Ether, which are used by investors to buy into ICO opportunities. The difference between Ethereum and Bitcoin is that Bitcoin is only a currency, while Ethereum is a technology that companies are using to build new ledger programs. Bitcoin and Ethereum use “blockchain” technology, but Ethereum’s is more powerful and is considered to be at the forefront of bitcoin innovation.
Ethereum’s technology is supported by the Enterprise Ethereum Alliance which includes Fortune 500 companies that have agreed to partner to develop the technology which is also known as “smart contract,” meaning that demanding business applications can automate complex applications.
What is potentially the most exciting about Ethereum’s technology is its potential for innovation in the retail space, or other commercial areas.
