Ether and bitcoin are similar in many ways: Each is a digital currency traded via online exchanges and stored in various types of cryptocurrency wallets.2 However, there are many significant differences. While bitcoin is designed as a currency and a store of value, the Ethereum network is intended for complex smart contracts and decentralized applications.

• Bitcoin signaled the emergence of a radically new form of digital money that operates outside the control of any government or corporation.

• With time, people began to realize that one of the underlying innovations of Bitcoin, the blockchain, could be used for other purposes. 

• Ethereum proposed to use blockchain technology not only for maintaining a decentralized payment network but also for storing computer code that can be used to power tamper-proof decentralized financial contracts and applications.

• Ethereum applications and contracts are powered by ether, the Ethereum network’s currency.

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• Key Differences

  While both the Bitcoin and Ethereum networks are powered by the principle of distributed ledgers and cryptography, the two differ technically in many ways. For example, transactions on the Ethereum network may contain executable code, while data affixed to Bitcoin network transactions is only used to record transaction information. Other differences include block time (an ETH transaction is confirmed in seconds, compared with minutes for BTC), and their consensus algorithms are different: Bitcoin uses SHA-256, while Ethereum uses LMDGhost.