While both Ethereum and Bitcoin are decentralized digital currencies that use blockchain technology, there are several key differences between them:
- Purpose: Bitcoin was created primarily as a peer-to-peer electronic cash system, whereas Ethereum was designed as a decentralized platform for building smart contracts and decentralized applications (DApps).
- Consensus Algorithm: Bitcoin uses the Proof of Work (PoW) consensus algorithm, which requires miners to solve complex mathematical problems to validate transactions and create new blocks. Ethereum, on the other hand, is in the process of transitioning to a Proof of Stake (PoS) consensus algorithm, which relies on validators staking their own ether to secure the network.
- Programming Language: Bitcoin's scripting language is relatively simple and limited, whereas Ethereum's programming language, Solidity, is Turing-complete, allowing for the creation of complex smart contracts and DApps.
- Supply: Bitcoin has a maximum supply cap of 21 million coins, while Ethereum has no hard cap, with new ethers being created as block rewards to incentivize validators.
Overall, while Bitcoin and Ethereum share some similarities, they have distinct differences in terms of their purpose, technology, and features.
The article does not constitute financial advice.
