What is Bitcoin's primary purpose?

Bitcoin's singular focus is being the best possible form of decentralized money and store of value.

How do Bitcoin and Ethereum differ on supply?

Bitcoin's 21M cap is permanent and unchangeable. Ethereum's supply policy has been modified multiple times and has no hard cap.

Why did Bitcoin NOT switch to Proof of Stake like Ethereum did?

Bitcoin prioritizes security and decentralization above efficiency. PoW is seen as more resistant to centralization than PoS.

Bitcoin vs Ethereum: Key Differences

8 min readarticleIncludes quiz · 3 questions

Bitcoin and Ethereum are the two largest cryptocurrencies, but they serve fundamentally different purposes. Understanding the differences helps you see why Bitcoin maximalists view them as entirely separate categories.

Purpose:

•Bitcoin: Digital money and store of value. Its sole mission is to be sound, decentralized money that no one controls
•Ethereum: A programmable platform for decentralized applications (dApps), smart contracts, and tokens. It aims to be a "world computer"

Bitcoin is trying to be the best money. Ethereum is trying to be the best platform.

Supply:

•Bitcoin: Fixed cap of 21 million coins. This can never change
•Ethereum: No fixed cap. Ether supply is managed through a combination of issuance and burning (EIP-1559), but the rules can and have been changed by developers

This is a fundamental difference. Bitcoin's monetary policy is set in stone. Ethereum's has changed multiple times.

Consensus mechanism:

•Bitcoin: Proof of Work (PoW) — miners spend real energy to secure the network. This has never changed
•Ethereum: Moved from Proof of Work to Proof of Stake (PoS) in 2022 ("The Merge"). Validators stake ETH instead of mining

Bitcoin's PoW is seen as more secure and decentralized but uses more energy. Ethereum's PoS is more energy-efficient but concentrates power among large stakers.

Decentralization:

•Bitcoin: No foundation, no CEO, no roadmap controlled by a single entity. Core development is extremely conservative — changes are rare and require near-universal consensus
•Ethereum: The Ethereum Foundation and Vitalik Buterin have significant influence over the protocol's direction. Major changes (like the PoS switch) can be pushed through by a smaller group of core developers

Simplicity vs complexity:

•Bitcoin: Intentionally simple. Limited scripting. The philosophy is that simplicity reduces attack surface and increases security
•Ethereum: Turing-complete smart contracts. More powerful but also more vulnerable — billions have been lost to smart contract bugs and exploits

Test Your Knowledge

3 questions · Passing score: 75%

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