Bitcoin vs Internet Computer: Which Crypto Should You Buy in 2021
Bitcoin and Internet Computer may already be in your investment watchlist. But which one has the better investment in 2021 and beyond?
Comparing Bitcoin and Internet Computer is a bit like comparing the old guard with the new kid on the block. Whereas one has been around for decades and is the established king of the crypto market, the other has been on the scene for a matter of weeks and is yet to demonstrate its capabilities.
However, others might say that Internet Computer’s spectacular entry into the market is somewhat reminiscent of Bitcoin’s - both were met with excitement and lauded for their potential to revolutionise the way in which we use technology. ICP’s incredible price run also echoes that which Bitcoin experienced in 2013, when BTC suddenly became seen as a millionaire maker.
But the similarities very much end here. Love it or hate it, Bitcoin now arguably represents the most basic application of blockchain - a peer-to-peer token exchange that can be used as a payment method. Internet Computer however, offers an entire decentralised ecosystem that allows developers to create apps, exchanges, new cryptocurrencies and even messenger services.
Effectively, Internet Computer is the internet within the internet and has the potential to disrupt numerous industries. However, Bitcoin remains the most successful cryptocurrency in terms of market capitalisation and uptake. So which is the best investment, Bitcoin or Internet Computer?
In the following comparison, we’ll look at the technical particulars of each cryptocurrency and consider which one is likely to prove a better investment in the coming years.
Internet Computer vs Bitcoin - The Key Differences
From a technical standpoint, comparing Internet Computer vs Bitcoin is a little unfair. The former represents the latest advancements in blockchain and cryptocurrency technology, whereas the latter has been around since 2009.
However, understanding the differences between the two is essential in building an idea of what the future may hold - both in terms of each project’s longevity and its potential as an investment asset.
Bitcoin is a cryptocurrency that needs no introduction. Launched in 2009, it introduced the idea of blockchain to the wider world and ostensibly promised a new era of finance and commerce.
According to Satoshi Nakamoto’s original whitepaper, Bitcoin would be a completely decentralised peer-to-peer payments system that would effectively take power away from traditional banks and financial institutions to democratise the world of finance.
Whilst Bitcoin might not have had the impact that was initially predicted, it has continued to carry the torch for cryptocurrency and is by far the most widely recognised name from the industry. Aside from technical advancements, Bitcoin also helped pave the way for cryptocurrency to become one of the most popular assets for retail trading.
Transactions and Speed
Bitcoin was originally intended as a peer-to-peer payments option, so it stands to reason that its transaction speed is a key factor when considering its place amongst competing tokens.
If you already invest in Bitcoin, then you may already be aware that BTC transactions are expensive and hugely resource-intensive - a problem that could see Bitcoin become unviable as a genuine medium of value exchange for everyday transactions.
The Bitcoin network is able to process approximately 3 - 5 transactions per second. By comparison, Ethereum can handle up to 20 and the likes of Visa can process around 1700 transactions per second.
The reason for its slow transaction time and high energy usage lies in how Bitcoin blocks are created. You may have heard of Bitcoin mining, which refers to this process. Put simply, computers on the Bitcoin network work to solve complex equations via the proof of work mechanism. In doing so, they verify transactions for each block and are rewarded for their work with BTC - which means that every time a block is successfully created, more BTC is released into the system.
Whilst the proof-of-work mechanism was a technical marvel when it first came to prominence, it has faced criticism in recent years due to its lack of scalability and negative impact on the environment.
Supply and Demand
Whatever the capabilities or technical advancements a cryptocurrency possesses, its value as an investment is almost entirely dependent on supply and demand. Of course, this question is particularly pertinent for crypto - as tokens are effectively created out of nothing on a network.
To create BTC scarcity, Bitcoin has an inbuilt deflationary mechanism. We noted above that cryptocurrency miners unlock new BTC when they verify blocks on the network. However, the reward they receive is halved at regular intervals. So whereas the reward started at 50 BTC, it was halved to 25 in 2013, then again in In 2018 and in May of 2020, so that the reward now stands at 6.23 - and will be halved again sometime in 2024.
The total supply of BTC is also hard-capped at 21 million. Combined with the diminishing number of tokens being released into the network, this should in theory create a deflationary effect which, assuming Bitcoin continues to prove popular in the cryptocurrency world, will have a positive impact on price.
On the demand side of things, BTC shows few signs of losing its grip as the number one digital asset. From the outset, 2021 has seen huge BTC trading volumes and more wallets have been opened over the last 12 months than ever before.
Internet Computer burst onto the cryptocurrency scene in May 2021, after some five years of development. It immediately made headlines all over the world thanks to its substantial price movement within its first week of trading, but the technology behind the project has the potential to have a serious impact on the digital landscape.
The project was developed by Swiss non-profit organisation DFINITY, with the intention of providing a decentralised environment for the development of cloud-based services.
Anyone thinking to invest in Internet Computer should note that this is an extremely ambitious project - in theory, the network provides a blockchain that runs an internet speed. This means that developers can, in theory, recreate any web-based services or applications within the Internet Computer network.
Naturally, the Internet Computer project attracted a lot of attention early on and this led to some substantial backing - with the likes of Polychain Capital and Andreessen Horowitz pumpkin some $121 million into the project throughout the development stage.
As we’ve already discussed, the potential applications of the Internet Computer network are pretty impressive. The platform can be used to create decentralised exchanges, content sharing platforms, social media sites and even messenger services.
But what does all this mean for Internet Computer’s native token, ICP? Firstly, ICP acts as a governance token on the network. This means holders of ICP get a say in how the project is run, including upgrades and protocol changes.
However, the ICP token also has numerous uses on the Internet Computer network. Arguably the most important developments of the project relate to the way in which programs operate through Canisters and Cycles.
Cycles are often thought of in the same way as Ethereum’s gas fees and Canisters are more often than not likened to smart contracts. These comparisons can be useful in getting to grips with how Internet Computer operates, but both actually have far more use cases.
One key thing to know is that ICP can be ‘dissolved’ into cycles, which are then used to run websites and applications as well as power computations on the Internet Computer.
Supply and Demand
ICP was rarely out of the headlines throughout its first week of trading, after the token’s price surged to $700.65 on its first day of trading and Internet Computer steamrolled its way into the top ten cryptocurrencies by market cap immediately after launching.
Naturally, this has led to a huge amount of interest, but in all likelihood, the true demand for ICP remains to be seen, as the several major exchanges are yet to list it as a trading option.
When it comes to supply, whilst Internet Computer does not have the same deflationary mechanism as Bitcoin, the tokens are effectively burnt when they are converted to Cycles. It is thought that new tokens will be released at a similar rate to keep the cost of developing on the network stable.
This means that, depending on the uptake and how new coins are released, the price of ICP could increase dramatically.
Internet Computer vs Bitcoin: Which Is The Better Investment?
It should already be fairly obvious that Internet Computer vs Bitcoin is something of a mismatched comparison. The two projects each have their own rationale and are not really competing in the same space. Of course, in technical terms, Internet Computer is the more sophisticated of the two, but Bitcoin certainly has the bigger name. So which is the better investment?
To shed some light on this matter, we have to consider several pieces of information. Firstly, we’ll take a look at previous price action, as this is what platforms use to make forecasts. Then we’ll look at what leading analysts are predicting for each token. Finally, we’ll hear a few expert opinions to get an idea of market sentiment towards each project.
Bitcoin Vs Internet Computer: Price History
Next up in our Bitcoin vs Internet Computer comparison, we’ll consider each token’s previous price movement. Of course, Internet Computer is a very new cryptocurrency, so the data isn’t there for an in-depth review. However, at the time of writing, it is all we have to go on.
As an investment asset, Bitcoin really is one of the true success stories of the modern age. Having started life trading for pennies, the price of BTC famously surged to $1, 242 in 2013 - turning many early investors into some of the world’s first crypto millionaires.
The next major price surge occurred towards the end of 2017, when Bitcoin soared to a then-record of $19,783. However, this was part of the famous crypto bubble that unceremoniously burst in the first few weeks of 2018, sending the price of BTC crashing to $3,408 before the year was out.
Of course, Bitcoin wasn’t down for long and prices were creeping up throughout most of 2019 and into 2020, before the first of several record-breaking bulls kicked off at the end of the year. The first saw Bitcoin hit $39,547 in January before things cooled for a short period. However, in April, BTC rallied again and surged to an all-time high of $64,804.72 per token.
Bitcoin may be a dated technology by crypto standards, but its recent price performance shows it is nowhere near ready to give up the limelight just yet.
Internet Computer ICP
At the time of writing, Internet Computer has been trading for little over a week. Despite having traded as an IOU leading up to its official launch, here we will only concern ourselves with Internet Computer’s price history under its ICP ticker.
We’ve already noted that ICP reached its all-time high of $700.65 per coin on its first day of trading. This may sound hugely impressive, but what is more impressive is just how volatile Internet Computer has been.
In fact, that same day, prices had tumbled back to around $333 before ICP rallied again the next day, climbing back to around $478. The first couple of days proved to be ICP’s strongest and by the weekend, prices were down to $280.
At the time of writing, it seems a downward trend has continued and ICP is trading at $167. Of course, this does not mean the honeymoon period is over, but it shows that investors should never be blinded by big numbers - despite its impressive debut, the price of ICP has been declining steadily.
Bitcoin Vs Internet Computer: Future Predictions
Price predictions are by definition speculative, but they nonetheless provide an idea of how a cryptocurrency is expected to perform. Effectively, they are guesswork based on analysis of previous prices and should not be relied upon as the sole basis of an investment strategy.
Bitcoin Price Prediction
After its incredible price runs early in 2021, there has been much talk of whether Bitcoin has peaked and will struggle to regain its record price set in April. Most platforms are still predicting growth, but some have it that BTC will take a year or two before reaching its highest price again.
According to TradingBeasts, Bitcoin BTC will start to creep up from its current price of $42,622 as we head into summer 2021. According to its technical analysis, Bitcoin will finish the year at an average price of $44,846. However, by December 2023 it is expected to surpass its all time high, reaching a potential high of $80,199.
DigitalCoinPrice, however, has put forward a far more optimistic Bitcoin price prediction. It has BTC hitting a new all-time high of $68,299 in July, before continuing to climb at an impressive rate throughout the second half of the year, finishing December at an average per-token trading price of $70,946.
Falling somewhere between the two predictions detailed above is WalletInvestor. It has Bitcoin climbing back above the $50,000 mark as early as June and following a steady upward curve for the remainder of 2021. By December 2021, the platform predicts the price of Bitcoin BTC to be $67,455.
Read More: Bitcoin Price Predictions
Internet Computer Price Prediction
Internet Computer price predictions have been understandably hard to correlate, as the token has been so volatile in its first week of trading. In fact, at the time of writing we found that many of the major platforms were refusing to commit to any ICP forecast at all!
We did find that PickACrypto.com has a very optimistic prediction for Internet Computer. According to the website, ICP will grow to somewhere between $1,000 and $1,750 USD by the end of 2021 and continue to rise at an impressive rate over the next two or three years.
Meanwhile, Wallet Investor sees an impressive year ahead for Internet Computer ICP - though there is no suggestion it will beat its ATH before 2021 is out. According to the platform, Internet Computer will see a lot of volatility before it creeps above the $500 mark by the end of September. From then, it will hold its value well and continued to climb, reaching $699 in December.
The last Internet Computer price prediction is the most pessimistic. CoinArbitrageBot sees ICP struggling to regain the impressive prices it saw in week one, only climbing as high as $288 before the end of the year. However, it should be noted that the technical analysis is based on a small amount of data and therefore it is likely to change dramatically if the price of ICP moves.
Internet Computer Vs Bitcoin: What the Experts Say
Bitcoin is easily the most discussed cryptocurrency on the planet, so it doesn’t take long to find comments relating to its current situation or potential for the future. One long time supporter of BTC is Galaxy Digital’s Mike Novogratz. After the record breaking price runs of 2021, Novogratz believes that the “existential threat of Bitcoin not being real is gone. Every institution in the world is participating and so it’s an asset class”.
Whilst “every institution” might be hyperbole, it’s certainly true that there has been a surge in support for Bitcoin, with payments giant PayPal, property firm WeWork and Elon Musk’s Tesla all offering to accept payment in the cryptocurrency in the last 6 months or so.
Elsewhere, Michael Saylor's MicroStrategy has added $10 million to its Bitcoin holding as the price growth cools. Saylor recently highlighted Bitcoin’s apparent stability by tweeting a screenshot showing gold would have provided returns 77% lower than those of BTC over the past year.
Several industry insiders have been quick to weigh in on what we can expect from Internet Computer. Messari analysts Mira Christanto and Wilson Withiam published a paper detailing some of the finer points of the project.
According to them, “the problem Dfinity is addressing extends beyond just blockchain technology - it’s addressing the issues plaguing traditional internet, such as relatively low data security and an oligopoly consisting of big tech companies.”
They added that “Dfinity has launched in the heart of the bull run, perhaps putting wind in their sails. However, successfully creating the ultimate world computer is still at play” - a nod to Internet Computer’s main rival, Ethereum.
Olaf Carlson-Wee, the founder of Polychain Capital, has been involved in Internet Computer for a while, having acquired IOU before ICP started trading. “Dfinity is the most important technology launched since Ethereum,” he said. “People like me in the crypto world recognize the magnitude of the technology breakthroughs Dfinity represents.”
Internet Computer Vs Bitcoin: Conclusion
There’s really no direct comparison to be made between Internet Computer and Bitcoin. The reality is that Ethereum is the real rival that could scupper DFINITY’s grand ambitions. Bitcoin continues to dominate as the market leader, but the reality is that technical particulars have very little to do with said dominance.
Ultimately, Internet Computer appears to have the credentials to stand the test of time, whereas the age of Bitcoin could one day draw to a close. However, as far as 2021 is concerned, Bitcoin is still the big name on the market.
The reality is that any cryptocurrency investor should manage risk through diversification and, as such, both BTC and ICP have their place. This is especially true of investors that are looking for both long and short term strategies.
How to Invest in Cryptocurrency in 2021
The cryptocurrency market has seen a very successful 2021 so far and there has been a surge in new investors looking to get in on the action. However, if you’re new to the cryptocurrency market you’ll need to find a broker or exchange before you can start making trades.
We recommend eToro for most users, but especially those with no prior experience of cryptocurrency. This is because eToro has a very user-friendly trading interface as well as plenty of information on cryptocurrency and markets in general.
Opening an account is easy and you gain access to the markets as soon as you are up and running.
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eToro have proven themselves trustworthy within the Crypto industry over many years – we recommend you try them out.
Virtual currencies are highly volatile. Your capital is at risk.
Bitcoin Vs. Other Cryptocurrencies:
Bitcoin Vs Internet Computer - FAQ
Bitcoin vs Internet Computer - which is better?
From a technical standpoint, Internet Computer is far more advanced and has more use cases than Bitcoin. However, any crypto investor will tell you this does not necessarily mean the price of ICP will rise. In fact, Bitcoin’s continued dominance of the market shows that reputation can mean a lot more than technical credentials.
Is Internet Computer an Ethereum Killer?
Every new smart network is labelled an Ethereum Killer at some point in its life. However, Internet Computer appears to have addressed certain issues that Ethereum has not - namely how to deliver internet-speed network service and with lower fees. Only time will tell how successful Internet Computer would be, but it could well rival Ethereum one day.
Where can I buy Bitcoin?
If you’re interested in buying Bitcoin then you’ll need to open an account with a broker or exchange. We recommend eToro, as it offers an intuitive trading platform as well as plenty of educational resources.
Which crypto should I invest in in 2021?
If you want to invest in cryptocurrency then the best approach is to start researching the different tokens on the market and build a diverse portfolio of investment. No matter how impressive a project appears, you should never put all your eggs in one basket. For the new investor, a few picks from the top ten tokens is a good place to start.