Cryptocurrency comparison

Theta vs Ethereum: A Comprehensive Comparison

I think millions of people are infatuated with cryptocurrency markets due to the variety of choices it provides. Today, I’m zooming in on two of the best projects and comparing Theta vs Ethereum in terms of use-case and as investments.

Let’s begin with a short introduction of the two cryptocurrency projects:

Ethereum is an open-source, decentralized project responsible for the smooth running of several smart contracts and decentralized applications (called DApps) in a safe manner without depending on a third party. Ether (ETH) is the cryptocurrency native to the Ethereum blockchain.

“Ehhh, what?”

Basically, Ethereum is like the internet: People can build stuff like apps and protocols on Ethereum, giving the “stuff” benefits of blockchain technology like decentralization and trustlessness.

I believe Ethereum might go to $8000 within 2021/2022. If you’re interested in Ethereum investing, you should check out this article I wrote showing my personal Ethereum investing and trading strategy.

Theta is a similar blockchain project, but it’s built to disrupt video delivery/streaming networks. It’s a platform for streams, vloggers, etc. to publish content.

Theta’s innovative platform has been active in the crypto industry since 2017, and aims to be a competitor to various streaming services available today.

The key difference between Theta and traditional video platforms like YouTube is that watchers earn money on the Theta network!

The native currency on this decentralized blockchain is based on the Ethereum blockchain and is called Theta token (THETA).

Suggested reading:

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In terms of market cap, Ethereum is 55 times larger than Theta: (July 2021)

Theta vs Ethereum Market cap
(source: Coinmarketcap)

Theta vs Ethereum – Historical Performance

Both of these decentralized crypto projects have a promising future owing to their aims and usability.

The two of them are backed by millions of users and several industry leaders.

The past year’s performance of Theta was outstanding. In fact, it was better than Dogecoin, as it climbed more than 17,000% from 2020 till March 2021.

On May 14th, the total market capitalization of Theta reached approximately $10 billion.

Theta, unlike other altcoins, has real-world use cases which attract a lot of investors.

In the future, Theta could create more demand in the video delivery sector due to its potential. 

Below you see Theta (above) and Ethereum’s (below) price performance from January of 2020 to March/May of 2021:

As you can see, Theta did way better than Ethereum. Theta surged over 17 thousand percent, while Ethereum “only” did about three thousand percent.

However, let’s take a look at how they perform in down-trends:

Below you see Theta and Ethereum’s price performance right after the peak in March/May of 2021:

We see that Theta crashed way harder than Ethereum did. Theta corrected 77.49%, while Ethereum corrected 63.61%.

That might not sound like a big difference, but it really is.

As far as historical performance indicates future performance, Theta seems to be the best and the riskiest investment.

This is not surprising, as the market cap of Theta is much smaller than Ethereum, and therefore easier to increase/decrease.

In other words:

If you’re willing to risk it – go for Theta. If you want to stick to the more safe and well-established Ethereum, you’ll still be well-positioned, with much less risk. Personally, I own both, but with about 5 times more ETH than Theta due to the higher risk of investing in Theta.

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Theta vs Ethereum – Use Cases and Objectives 

Theta and Ethereum differ greatly in terms of use cases, and the problems both of these projects aim to solve. 

Theta 

The team of developers associated with The Theta blockchain designed it in a way that rewards users who join Theta for sharing their video streaming resources, such as extra bandwidth and computing capabilities.

As a consequence, when more people join Theta, the video streaming quality will improve drastically. In exchange, they receive tokens as incentives.

THETA, whose supply has been capped to 1 billion, has a finite supply, making the token more valuable.

Theta’s decentralized video delivery network has room for expansion and interoperability due to being ERC-20 standard compliant.

Existing users and those who come to join this platform can independently use its technical features.  

Objectives: 

  • The current scenario of online video streaming has several limitations such a third-party control over all content delivery pipelines. A decentralized project like Theta improves the situation by breaking the traditional and centralized approach. 

  • Geographical limitations make video streaming a hassle for consumers around the world. Theta network’s model is designed to be free from such restrictions and allow people from any corner of the world to partake in its global infrastructure. 

  • Nowadays, different types of video content are available on different platforms, for example, Netflix, the video streaming giant does not support esports, conferencing, etc. But with Theta’s open-source project participants could access not only TV or movies but also peer-to-peer streaming, and education 

  • The best thing about Theta’s platform is that the entire open-source project is powered by the users. This is a major difference between Theta and its competitors (the leading video content delivery providers) like YouTube, Netflix, and Amazon Prime Video, etc.

Ethereum 

Ethereum is also an open-source decentralized project, but it is unique compared to other newer crypto projects that were released later on.

Ethereum, like Bitcoin, is a sort of public ledger, which means it is not stored in one place, but spread across the globe.

Ethereum’s public ledger is available on several thousand computers (nodes) belonging to global volunteers.

To understand Ethereum blockchain, I look at it as a supercomputer used to solve mathematical intricacies for confirming transactions happening on the network.  

Note: Ether, the cryptocurrency of this blockchain, functions similar to any other digital currency for financial transactions and is also used for compensating miners. 

Objectives 

  • The Ethereum platform is known to be useful for developers who want to build decentralized applications to cater to a wide range of purposes such as a digital currency swapping, wallets, etc. Ethereum’s main goal is to facilitate various functionalities by hosting them on its versatile and secure blockchain. 

  • Through DApps, Ethereum could lead several next-generation programs that could function in a decentralized network like Distributed ledgers and Tor. These applications open a world of opportunities and are considered to be the most popular in the blockchain sector.  

  • Ethereum and Bitcoin share some features that have been modified in the Ethereum blockchain prior to implementation. Ethereum also has a strategy (shared by BitTorrent) of having a decentralized OS for the sole reason of creating DApps. 

  • Ethereum exists as a system that gives all of its user’s total control over their data while also developing and running various applications on its blockchain. Ether exists to power these applications. But it also means that as more people turn to use Ethereum, higher fees would be incurred.

Future Performance of Theta and Ethereum

Ethereum is supported by a massive and loyal community which contributes to its incessant growth. The community is also responsible for many improvements in the blockchain and can upvote or downvote proposals made by lead Ethereum developers.

The latest hard fork is another example of how Ethereum continues to proceed with a string of improvements in its ecosystem to benefit all users. Ethereum is only overshadowed by the cryptocurrency mammoth Bitcoin that drives the entire market.

When Ethereum 2.0 comes out, it will likely be game-over for a lot of other cryptocurrencies. Personally, I think that projects like Cardano, Solana, and others need to establish a reasonably large ecosystem of Dapps, developers, and users before Ethereum 2.0 arrives.

Theta, however, will likely not be negatively affected by the 2.0 upgrade to Ethereum. Theta is not a direct competitor to Ethereum and might actually benefit from the general adoption of blockchain tech that Ethereum 2.0 brings.

In addition, the market that Theta is trying to capture is growing at an accelerating pace, which in turn increases Theta’s potential.

It’s hard to make future claims about anything, but it’s even harder when it comes to cryptocurrencies…

The market, and the specific coins move so fast and are highly unpredictable. The only thing to do is to understand the potential pitfalls and the potential of the different coins.

My general thoughts:

  • Ethereum is well established, and have less to prove than Theta. The only really big risks I can see with Ethereum is that the 2.0 upgrade might fail, or that it takes 10 years or something to implement. If this happens, the ecosystem of developers and DApps will migrate to another blockchain and Ethereum will die.

  • The risks for Theta is that it’s still relatively new, and that anything can happen to this project. They are beginning to establish themselves, but still have a long way to go before reaching “Ethereum status”, if we can call it that.

  • However, with the risks of not being well established there also follows potential. Theta has more room to grow than Ethereum in terms of market cap and price. Both have a great outlook, but I think that you’ll be better positioned for explosive growth with Theta, if you can stomach the risks associated with it.

Conclusion:  Ethereum Is Best For investors, While Theta Is Best For Traders

Personally, I prefer to take lower risks and therefore favor Ethereum. I think that Ethereum is the best long-term (several years) investment of the two, due to the lower risk. However, if you’re more of a trader, or a swing trader, Theta is the best one.

In terms of use-case and objective, they’re both fascinating. Theta has more to prove and is not as established as Ethereum, but as a consequence, has more potential as well.

I have invested in both but hold way more Ethereum than Theta.

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What are your thoughts?

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