Bitcoin (BTC) and Ethereum (ETH) are the two largest cryptocurrencies by market capitalization and are key pillars of the crypto ecosystem; however, they serve distinctly different purposes and operate on different underlying mechanisms.

Here is a breakdown of their key differences:

### 1. Core Purpose and Functionality

* **Bitcoin (BTC): "Digital Gold" / Store of Value**

* **Purpose:** Bitcoin was primarily created as a decentralized digital currency, an electronic cash transfer system. Its main function is to serve as a secure store of value and a medium of exchange, similar to digital gold.