What Is the Difference Between Bitcoin and Ethereum?

Bitcoin and Ethereum are both large blockchain networks, but they have different designs, goals, and trade offs.

Purpose

Bitcoin

Bitcoin began as peer to peer electronic cash, focused on sound money, secure settlement, and a stable protocol that businesses can build on.

Ethereum

Ethereum was created as a "world computer" for running general purpose smart contracts and decentralized applications.

Data Model

UTXO Model

Bitcoin uses a UTXO model. Coins are discrete outputs that can be combined and split. This model is simple to verify and scales well for parallel processing.

Account Model

Ethereum uses an account based model. Each account has a changing balance and state. This can be convenient for complex contracts but is more state heavy.

Protocol Philosophy

Stability First

Bitcoin places a lot of importance on a long term stable base protocol and external legal and commercial frameworks on top.

Experimentation First

Ethereum has changed its core rules several times, including shifting from proof of work to proof of stake, which places more emphasis on protocol level governance and experimentation.

Smart Contracts

Bitcoin Script

Bitcoin supports scripting and smart contracts through a stack based language and op codes. On scalable implementations, very complex logic can be expressed on chain.

EVM & Solidity

Ethereum was designed from the start for general purpose smart contracts using the Ethereum Virtual Machine and languages like Solidity, so most dApps and tokens today are on Ethereum or similar platforms.

Consensus & Security

Proof of Work

Classic Bitcoin uses proof of work, where security comes from miners committing energy and hardware.

Proof of Stake

Ethereum started with proof of work and later moved to proof of stake, where security comes from locked coins and protocol rules about slashing.

In short, Bitcoin focuses on being a durable, high integrity foundation for money and data, while Ethereum focuses more on being a flexible platform for programmable assets and applications. Both approaches have benefits and trade offs that users and developers should understand.