Ethereum is a decentralized platform that allows developers to build and deploy smart contracts and decentralized applications (dApps). It uses blockchain technology like Bitcoin, but its functionality goes beyond digital currency. Ethereum's native cryptocurrency is called Ether (ETH).
One of the key differences between Ethereum and Bitcoin is their primary purpose. While Bitcoin is primarily a digital currency used for peer-to-peer transactions, Ethereum aims to provide a platform for developers to build various applications on its blockchain. Ethereum also introduces the concept of smart contracts, which are self-executing contracts with the terms of the agreement directly written into code.
Another difference is the consensus algorithm used by each blockchain. Bitcoin uses the Proof of Work (PoW) algorithm, which requires miners to solve complex mathematical puzzles to validate transactions and create new blocks. Ethereum is transitioning towards a Proof of Stake (PoS) algorithm, which involves validators staking their Ether to secure the network and validate transactions, instead of mining.
In summary, while both Bitcoin and Ethereum are blockchain-based cryptocurrencies, Ethereum offers a more versatile platform for developers to create decentralized applications and smart contracts, while Bitcoin remains focused on being a digital currency and store of value.
