Difference Between Bitcoin and Ethereum
Bitcoin and Ethereum are two of the most popular cryptocurrencies, but they serve different purposes and operate on unique technologies.
1. Purpose
Bitcoin was created as a digital currency to facilitate peer-to-peer transactions and serve as a store of value. It aims to replace traditional currencies. In contrast, Ethereum was designed as a platform that enables developers to create decentralized applications (dApps) and smart contracts.
2. Technology
Bitcoin operates on a proof-of-work consensus mechanism, meaning miners solve complex mathematical problems to validate transactions and secure the network. Ethereum initially used proof of work but is transitioning to proof of stake, which allows users to validate transactions and create new blocks by holding Ether.
3. Supply
Bitcoin has a capped supply of 21 million coins, making it deflationary in nature. Ethereum, however, does not have a fixed supply, which can lead to inflation in the long term.
4. Use Cases
Bitcoin is primarily used as a digital gold to store value and hedge against inflation, whereas Ethereum's flexibility allows it to support various functions, including NFTs and decentralized finance (DeFi) applications.
In summary, while both are leading cryptocurrencies, Bitcoin and Ethereum cater to different market needs and use-case scenarios.