Ethereum is a programmable blockchain. Besides moving its currency, ETH, it runs code called smart contracts that anyone can use. Bitcoin was designed mainly as digital money with a fixed supply, while Ethereum was designed as a shared computer that charges fees in ETH. The two also differ in bookkeeping, monetary policy and security: Bitcoin tracks individual coins and uses proof of work, while Ethereum tracks account balances and uses proof of stake.
What was Ethereum built to do?
Ethereum was built to let anyone run their own programs on a blockchain, rather than only send payments. Its 2014 whitepaper criticized Bitcoin's scripting language for lacking loops, for having little control over how much can be withdrawn, and for having no way to keep state across multiple steps. It proposed "a blockchain with a built-in Turing-complete programming language," meaning one that can in principle express any computation. Bitcoin kept a narrower base layer and leaves most fast payments to systems built on top of it, such as the Lightning Network.
The two networks launched six years apart. Bitcoin went live in January 2009, and Ethereum followed on July 30, 2015. Bitcoin has added scripting features since then, including taproot in 2021, but it remains far more limited than Ethereum's general-purpose environment.
Ethereum and Bitcoin side by side
| Bitcoin | Ethereum | |
|---|---|---|
| Main goal | Peer-to-peer digital money | General-purpose programmable network |
| Launched | January 2009 | July 2015 |
| Bookkeeping | Unspent outputs (UTXO) | Accounts with balances |
| Programs | Limited script | Smart contracts on the EVM |
| Security | Proof of work, miners | Proof of stake, validators |
| Timing | About 10 minutes per block | 12-second slots |
| Finality | Probabilistic, six confirmations is the usual guidance | About 15 minutes |
| Supply limit | Just under 21 million | No fixed cap |
| New supply (October 2026) | About 450 BTC a day | Roughly 3,000 ETH a day, minus burned fees (our estimate) |
| Fee currency | BTC | ETH |
Accounts vs. UTXO: how each one keeps score
Bitcoin tracks separate chunks of coin, while Ethereum tracks a running balance for each address. The difference is easiest to see with one payment.
On Bitcoin, your balance is the total of the unspent transaction outputs (UTXOs) your wallet can unlock. Suppose you hold two, worth 0.3 BTC and 0.5 BTC, and want to pay 0.6 BTC. Your transaction consumes both and creates new ones:
- 0.6 BTC to the recipient
- 0.1999 BTC back to you as change
- 0.0001 BTC left over as the miner's fee
On Ethereum, your account just has a number. Suppose it holds 0.8 ETH and has a nonce, a transaction counter, of 7. You send 0.6 ETH. A simple transfer uses 21,000 gas, so at an illustrative price of 2 gwei the fee is 0.000042 ETH. Your balance becomes 0.199958 ETH and your nonce becomes 8. The nonce stops anyone from replaying the same transaction.
This choice shapes what each network does well. A UTXO is either spent or unspent, which keeps verification simple but makes multi-step logic awkward. An Ethereum account can hold ETH, code and storage, which is what lets a contract keep a running record.
Ethereum has two kinds of account: externally owned accounts, controlled by a private key, and contract accounts, controlled by their code. That line has blurred. Since the Pectra upgrade of May 7, 2025, EIP-7702 has let a key-controlled account point to contract code, which enables features such as batched transactions.
What is the Ethereum Virtual Machine?
The Ethereum Virtual Machine (EVM) is the shared computer that executes smart contracts, and every full node runs it. Ethereum's documentation describes the network as a distributed state machine rather than only a ledger. The current state plus a batch of valid transactions always produces the same next state, so thousands of nodes can run the same code and reach the same result.
Computation costs money. Each operation consumes gas, and the fee rises and falls with demand. This limits how much work any transaction can demand from the network. Because a contract can't simply loop forever for free, a global computer becomes practical.
That design is why tokens, stablecoins and lending markets are so common on Ethereum. Many layer 2 networks also run EVM-compatible software, so the same contracts work there at lower cost.
How do their monetary policies differ?
Bitcoin has a fixed schedule and a hard limit, while Ethereum has an adjustable system with no cap.
Bitcoin. The subsidy paid to miners halves every 210,000 blocks, and it has been 3.125 BTC since April 2024. Going by that schedule, about 20.1 million BTC existed by October 2026, growing about 0.8% a year.
Ethereum. ETH has no fixed supply cap. Two forces move the total:
- Issuance. Validators earn new ETH. Ethereum.org gives about 1,700 ETH a day at 14 million ETH staked, and total issuance grows as more ETH is staked, roughly with the square root of the total. With about 43.7 million ETH staked in early October 2026, we estimate about 3,000 ETH a day, or about 0.9% a year on a supply near 122 million ETH.
- The burn. Since the London upgrade of August 2021, EIP-1559 has destroyed each transaction's base fee. Etherscan's running total shows more than 4.6 million ETH burned.
A common misconception: "ETH is deflationary"
ETH's supply shrinks only when the burn exceeds issuance, and that depends on network activity. Ethereum.org says an average gas price of at least 16 gwei would offset 1,700 ETH of daily issuance. Recent gas tracker readings have been far below 1 gwei, so the burn offsets only a small part of what is issued, and supply has been growing. That could change if demand for block space returns.
Policy has also changed before. The Merge cut issuance by about 88%, from around 13,000 ETH a day. Bitcoin's subsidy schedule has stayed as written since launch. Whether you value adaptability or fixed rules more is a judgment call, and it says nothing about future prices.
Proof of stake vs. proof of work
Bitcoin's security comes from energy and hardware, while Ethereum's comes from capital that can be destroyed. Here's the wider comparison of proof of work and proof of stake.
Ethereum moved from mining to staking in The Merge on September 15, 2022, which cut its energy use by about 99.95%. How it works today:
- Validators stake. Running your own validator takes 32 ETH.
- One proposes. Each 12-second slot, a randomly chosen validator proposes a block.
- Others attest. A committee votes on it, and every active validator attests once per 32-slot epoch.
- Checkpoints finalize. Votes representing two-thirds of staked ETH justify a checkpoint and finalize the one before it, which takes about 15 minutes.
- Cheaters get slashed. Provable misbehavior burns part of the stake and removes the validator. The penalty grows if many validators are slashed around the same time, up to their full effective balance.
Most people can't stake 32 ETH alone, which has fueled liquid staking and restaking. Both add their own risks. You can read more in our staking guides.
How do the two networks change over time?
Ethereum upgrades often and on a public schedule, while Bitcoin changes rarely. Ethereum's recent hard forks include Dencun (March 2024), Pectra (May 2025) and Fusaka (December 2025). Bitcoin's last major consensus upgrade was taproot, which activated at block 709,632 in November 2021.
The most controversial Ethereum change came in July 2016. After an attacker drained over 3.6 million ETH from a contract called The DAO, the community forked the chain to return the funds. Those who rejected the change continued the old chain as Ethereum Classic. Critics saw that as breaking the promise of unstoppable code, and supporters saw it as a one-time rescue.
What are the main risks of each?
Each network's main risks follow from its design. Neither is risk-free.
- Ethereum: contract risk. Code bugs can lose user funds, and there is no general refund. The DAO fork was an exception.
- Ethereum: complexity. Frequent upgrades and many contracts mean more that can go wrong. Staked ETH can also concentrate in a few large providers.
- Bitcoin: limited programmability. Applications that are simple on Ethereum are hard or impossible on Bitcoin's base layer.
- Bitcoin: the security budget. Fees were only about 0.63% of block rewards in September 2026. As the subsidy keeps halving, fees or price have to fill the gap.
They aren't really competing for the same job. One is a monetary network that changes slowly, and the other is a programmable platform that evolves quickly. Choosing between them for a given purpose depends on which properties you need. Browse more smart contract explainers to go deeper.
Key takeaways
- Ethereum is a programmable blockchain, and Bitcoin is primarily a monetary network.
- Bitcoin tracks unspent outputs, while Ethereum tracks accounts with balances, nonces and code.
- The EVM runs smart contracts on every node, and gas meters the work.
- Bitcoin's supply is capped below 21 million. ETH has no cap, and its supply depends on issuance minus burned fees.
- Bitcoin uses proof of work. Ethereum has used proof of stake since September 15, 2022, with finality in about 15 minutes.
- ETH isn't always deflationary: low gas means a small burn.
Sources
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