While both Ethereum and Bitcoin are cryptocurrencies that utilize blockchain technology, they serve different purposes and have distinct features. Below are the key differences between Ethereum and Bitcoin:

1. **Purpose and Functionality**

• Bitcoin: Bitcoin was created primarily as a digital currency to serve as a medium of exchange and a store of value. Its main purpose is to facilitate peer-to-peer transactions without the need for intermediaries, such as banks.
• Ethereum: Ethereum, on the other hand, is a decentralized platform designed for building smart contracts and decentralized applications (dApps). While it also has a cryptocurrency (Ether), its primary focus is on enabling programmable transactions and complex applications.

2. **Smart Contracts**

• Bitcoin: Bitcoin's scripting language is limited and primarily designed for simple transactions. It does not support complex smart contracts.
• Ethereum: Ethereum supports Turing-complete smart contracts, which allow developers to create complex applications that can automate processes and execute self-enforcing contracts without intermediaries.

3. **Blockchain Technology**

• Bitcoin: Bitcoin's blockchain is primarily focused on recording transactions and maintaining a ledger of ownership. It uses a Proof of Work (PoW) consensus mechanism to validate transactions and secure the network.
• Ethereum: Ethereum's blockchain is designed to support a wide range of applications and functionalities. As of Ethereum 2.0, it has transitioned to a Proof of Stake (PoS) consensus mechanism, which aims to improve scalability and reduce energy consumption.

4. **Supply and Monetary Policy**

• Bitcoin: Bitcoin has a capped supply of 21 million coins, making it deflationary. This scarcity is built into its protocol and is one of the reasons it is often referred to as "digital gold."
• Ethereum: Ethereum does not have a fixed supply limit. Its monetary policy has evolved, and with the introduction of Ethereum Improvement Proposals (EIPs), the issuance rate can change, allowing for flexibility based on network needs.

5. **Development Community and Ecosystem**

• Bitcoin: Bitcoin has a more conservative development approach, focusing on stability and security. Changes to the Bitcoin protocol are implemented cautiously and often require broad consensus.
• Ethereum: Ethereum has a more dynamic and experimental development community. It encourages innovation and rapid development of new features and applications, leading to a diverse ecosystem of projects.

6. **Sample Code: Smart Contract on Ethereum**

To illustrate the difference in functionality, here’s a simple smart contract written in Solidity for Ethereum:

solidity
// SPDX-License-Identifier: MIT
pragma solidity ^0.8.0;

contract SimpleStorage {
    uint256 private storedData;

    function set(uint256 x) public {
        storedData = x;
    }

    function get() public view returns (uint256) {
        return storedData;
    }
}

This SimpleStorage contract allows users to store and retrieve a number on the Ethereum blockchain, showcasing Ethereum's ability to handle complex logic and data storage.

7. **Conclusion**

In summary, while Bitcoin and Ethereum share some commonalities as cryptocurrencies, they serve different purposes and have unique features. Bitcoin is primarily a digital currency focused on peer-to-peer transactions, whereas Ethereum is a versatile platform for building decentralized applications and executing smart contracts. Understanding these differences is crucial for anyone looking to engage with either of these groundbreaking technologies.