Bancor vs Ethereum

Knowing which cryptocurrency to invest in can be a hassle, especially if you are a newcomer to the crypto industry who’s just scrolling through the list of tokens based on market capitalization for the very first time. 

While the most successful tokens will typically be on the top of any list, there are also projects which truly have the potential to outshine others throughout the following decade.

To clear things up a bit, and to make your investment decision a bit easier, today, we will be exploring the differences between the Bancor vs Ethereum cryptocurrencies and the projects they are utilized in.

Bancor vs Ethereum: Explained

Ethereum is the second-largest cryptocurrency token in terms of market capitalization and is a project that has become a home for digital money, global payments, and decentralized applications (dApps).

On the other hand, Bancor is essentially a protocol that lets users convert different virtual currency tokens directly and instantly instead of relying on cryptocurrency exchanges. This lets traders gain access to an open financial marketplace without a barrier of entry.

Since these are two projects covering two specific needs and use-cases, we will compare them across four categories, including the project itself, the utility of their native cryptocurrency token, the current market capitalization, as well as value and the overall community so let’s dive in.

  1. Project

Ethereum is a decentralized blockchain platform that was created with the intention of  enabling a peer-to-peer (P2P) network to securely execute and verify application code. This is done through the utilization of smart contracts. You can easily learn how to trade Ethereum here.

These smart contracts let users transact with each other without relying on any central authority. Each transaction record on the Ethereum blockchain is fully immutable, fully verifiable, and gets distributed securely across the network. As such, participants gain full ownership, alongside visibility of all the transaction data. Only time will tell what will be the next Ethereum.

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Bancor is a decentralized trading protocol that aims to empower traders, liquidity providers as well as developers to truly participate within an open financial marketplace. The protocol is fully open-sourced, and everyone can access it at any point in time.

Then there’s the Bancor DAO, which is owned as well as fully operated by the community as a decentralized autonomous organization (DAO). This is a project that’s governed through a transparent voting system, where all stakeholders can get involved and contribute to the future of the Bancor Protocol.

  1. Utility

Ether (ETH) is the native cryptocurrency token that powers the Ethereum blockchain. Every time a miner ends up verifying a transaction, they get rewarded with a portion of Ether as a reward for doing so. The interesting part about Ethereum’s token specifically is that it is programmed to increase 4.5% each year. 

Miners earn ETH in the form of fees for computations processed by the network. However, these are paid out in “gas” instead of ETH, which is a special computational unit. Note that With the Ethereum 2.0 upgrade, Ethereum is moving to a Proof-of-Stake (PoS) consensus model, which would drastically shift the usage and utility of the ETH cryptocurrency token.

Under the new model, any user that owns a minimum of 32 ETH can lock the funds in a contract, which would then let them earn rewards for solving the computations required to add new blocks within the blockchain.

BNT is the native cryptocurrency token of Bancor. Its main goal as a project is to automate a service known as the automated market maker (AMM) model. In other words, it aims to incentivize its users to deposit assets within pools, where each pool consists of a pair of tokens as well as a reserve of the BNT cryptocurrency.

When a user ends up depositing coins within a pool, in return for doing so, they can gain a new token. This is what is called a pool token and lets users retrieve the original locked number of tokens within the protocol. As such, BNB tokens are used as the intermediary currency when each token is traded.

Note that Bancor’s protocol converts between different ERC-20 compatible tokens, and each smart token is linked to smart contracts that have reserves for other tokens. What this essentially means is that Bancor is fully compatible with all and any Ethereum-based tokens.

  1. Market Capitalization and Value

Ethereum has a market cap of $332,778,724,063, a 24-hour trading volume of $14,129,222,918, and a circulating supply of 119,402,447.00 ETH tokens.

As of February 1, 2022, its value is at $2,787.54 per ETH token. This puts it at rank #2 in terms of market capitalization, right under Bitcoin (BTC).

Bancor has a market cap of $617,226,482, a 24-hour trading volume of $22,825,595, and a circulating supply of 243,235,459.42 BNT tokens

As of February 1, 2022, its value is at $2.54 per token. This puts it at rank #104 in terms of market capitalization.

This means that Ethereum is by far the larger cryptocurrency in terms of value, market capitalization, and overall adoption; however, Banco is built to provide an additional level of utility for traders, and as such, has huge potential for growth.

  1. Community

Ethereum has a huge following on social media. On Twitter specifically, it has a follower count of 2.1 million and regularly posts updates. In terms of its Discord channel, it has over 16,000 members, where typically around 3,000 are active at any given time.

On the other hand, Bancor is a much smaller project; however, it still has a dedicated and full community surrounding it. On Twitter specifically, it has a follower count of over 114.600 and a Discord community of over 4,400 members, out of which around 1,000 are constantly active.

Bancor vs. Ethereum: Conclusion

Both Bancor, as well as Ethereum, have been developed with different interests and utilities in mind. One is an entire blockchain network, while the other is a protocol specifically developed to solve an issue a lot of traders have faced historically within the crypto space.

Each of them has its own native cryptocurrency token, and each of them has showcased a high level of growth since its creation. Ultimately, both projects have their appeal and provide a solid entry point within the world of crypto.