Bitcoin vs Ethereum: different goals, different tradeoffs

Bitcoin and Ethereum are the two largest public blockchains and the two most-traded cryptocurrencies. They’re often discussed as alternatives. They’re really different products with different goals — comparing them as “which one should I buy” misses what each is actually for.

The headline differences

What each was designed for

Bitcoin: sound digital money

Satoshi Nakamoto’s 2008 whitepaper proposed a system for “a purely peer-to-peer version of electronic cash” that doesn’t require trusted intermediaries. The design choices follow:

• Hard supply cap of 21 million BTC, mimicking gold’s scarcity.
• Proof-of-work, expensive to attack precisely because expensive to mine.
• Conservative protocol changes — Bitcoin Core releases major upgrades roughly once per year.
• Limited scripting — by design — to avoid the bug surface of full programmability.

Bitcoin’s use case has converged on “digital gold”: a censorship-resistant store of value. It’s not optimised for being a medium of exchange — block times are too slow, fees too variable.

Ethereum: programmable money

Vitalik Buterin’s 2014 whitepaper proposed a blockchain with a Turing-complete virtual machine — the EVM — so any deterministic program could be run on-chain. The design choices follow:

• Smart contracts, the building blocks of DeFi, NFTs, DAOs, ENS, and most of what people mean by “Web3.”
• Faster blocks (12 seconds), so applications feel interactive.
• Fees in gas (denominated in Gwei), proportional to the computation performed.
• Aggressive protocol roadmap — proof-of-stake transition (the Merge, 2022), sharding work, account abstraction, EIP-1559 fee market reform.

Ethereum’s use case is broad and evolving: decentralised finance, identity, gaming, on-chain coordination. The base token ETH is required to pay gas for any of this activity.

The energy debate, post-Merge

Pre-2022, both networks used proof-of-work and both consumed substantial energy. After Ethereum’s Merge to proof-of-stake in September 2022, ETH transactions require ~99.95% less energy than before. Bitcoin still uses proof-of-work and is the dominant energy consumer among cryptocurrencies — roughly 130 TWh annually as of 2024, comparable to Argentina’s electricity use.

The political argument cuts both ways. Bitcoin defenders argue the energy is the security; Ethereum supporters argue the same security can be achieved with stake at the line instead of joules.

The unit conventions

Bitcoin: 1 BTC = 100,000,000 satoshi. The satoshi count fits comfortably in a 64-bit integer, so Bitcoin libraries rarely need BigInt. See our Satoshi glossary entry.

Ethereum: 1 ETH = 10⁹ Gwei = 10¹⁸ Wei. The 19-digit precision exceeds JavaScript’s Number type, so production Ethereum libraries use BigInt throughout. Our Wei / Gwei / ETH converter uses BigInt to round-trip without precision loss.

Should you hold both?

That’s an investment question we don’t answer — Convertitive doesn’t give financial advice. But from a purely structural view, BTC and ETH solve different problems and historical correlation has run high (typically 0.7-0.9) without being identity. A portfolio holding both is different from a portfolio holding twice as much of one.

For the math — converting between sub-units, computing gas fees, sanity-checking transaction hex — use our crypto cluster.