#BTCvsETH The **BTC vs. ETH** debate is one of the most discussed topics in the crypto space. Here’s a breakdown of their key differences:
### **1. Purpose & Functionality**
- **Bitcoin (BTC)** – Primarily a **store of value** and **digital gold**. Designed as a decentralized peer-to-peer currency and a hedge against inflation.
- **Ethereum (ETH)** – A **smart contract platform** enabling decentralized apps (dApps), DeFi, NFTs, and more. ETH is both a cryptocurrency and a utility token for transactions and gas fees.
### **2. Supply & Monetary Policy**
- **BTC** – Fixed supply of **21 million coins**, with a halving event every 4 years (next in **2024**). Highly deflationary.
- **ETH** – No hard cap, but issuance is controlled via staking rewards and burning mechanisms (EIP-1559). Currently **mildly inflationary**, but could become deflationary with high network activity.
### **3. Consensus Mechanism**
- **BTC** – Uses **Proof-of-Work (PoW)**, requiring massive computational power (mining).
- **ETH** – Transitioned to **Proof-of-Stake (PoS)** with Ethereum 2.0, making it more energy-efficient.
### **4. Speed & Scalability**
- **BTC** – ~7 transactions per second (TPS), slower but highly secure. Layer-2 solutions (Lightning Network) help scalability.
- **ETH** – ~15-30 TPS (higher with rollups). Layer-2 solutions (Arbitrum, Optimism, zkSync) boost throughput.
### **5. Market Position**
- **BTC** – Dominates as **#1 crypto by market cap**, seen as "digital gold" and a macro asset.
- **ETH** – **#2 crypto**, but leads in **developer activity, DeFi, and NFTs**.
### **6. Investment Perspective**
- **BTC** – Best for **long-term store of value**, lower risk, and institutional adoption.
- **ETH** – Higher growth potential due to **DeFi, staking yields, and ecosystem innovation**, but more regulatory risks.
