Bitcoin vs Ethereum: Purpose, Supply and Technology Compared
Short answer. Bitcoin was designed as peer-to-peer digital money and a store of value, with a hard cap of 21 million coins. Ethereum is a programmable blockchain that runs smart contracts and applications; its coin, ether, pays for computation. Bitcoin favours simplicity and security; Ethereum favours flexibility.
Side by side
| Bitcoin (BTC) | Ethereum (ETH) | |
|---|---|---|
| Launched | 2009 | 2015 |
| Main purpose | Digital money and store of value | Smart contracts, decentralised apps, tokens |
| Supply | Capped at 21 million | No hard cap; issuance and fee burning vary |
| Consensus | Proof of work | Proof of stake (since 2022) |
| Accounting model | UTXO | Account-based (account vs UTXO) |
| Programmability | Limited scripting | Turing-complete smart contracts |
| Ways to earn | Mining | Staking |
Which one fits you?
Lean towards Bitcoin (BTC) if…
- you want simple, scarce digital money
- you value the longest security track record
Lean towards Ethereum (ETH) if…
- you want to use or build decentralised applications
- you want yield through staking
Frequently asked questions
Which is a better investment?
Neither is guaranteed. Both are volatile assets, and their price drivers differ; do not invest more than you can afford to lose.
Why did Ethereum move to proof of stake?
To cut energy use by over 99% and change how new coins are issued; the Merge happened in September 2022.
Can Bitcoin run smart contracts?
Only in limited forms. Layers built on top of Bitcoin add more features, but it is not designed as a general platform.
General education, not personal financial advice. Figures are typical US examples and vary by provider and year.