What Is the Difference between Bitcoin and Ethereum?

Of the more than 9000 cryptocurrencies in the market, Bitcoin and Ethereum are both in the top three. According to crypto researchers, Ethereum has the potential to surpass Bitcoin in terms of value. But how exactly does Ethereum stack up against Bitcoin in terms of functions, usage, and more?

In this article, we have covered the similarities and differences between these two popular cryptocurrencies. So, keep reading!!

Bitcoin vs. Ethereum

First, it is important to understand that cryptocurrency is divided into two categories: Coins (e.g., Bitcoin, Litecoin, Monero, etc.) and Tokens (e.g., Ether, NEO, etc.).

Bitcoin is a “Coin”

Coins are referred to those cryptocurrencies that are built on their native blockchain network. Bitcoin has become an immensely popular and well-known digital coin around the globe. It also stands at the top of the charts with the highest market cap among other cryptocurrencies available right now.

Ether is a “Token”

Tokens are created on top of the existing blockchain. Ether is the transactional token of the Ethereum network. It is referred to as the cryptocurrency of the Ethereum network, but metaphorically speaking, it is the “fuel” of the network.

Now we know the basic difference between Bitcoin and Ether, let us move ahead with the detailed analysis of both cryptocurrencies.


Bitcoin was introduced as a replacement to fiat currencies and enables peer-to-peer transactions. It was created to give complete power to individuals who own the currency (without the interference of any central authority).

Ether also enables peer-to-peer transactions, but it is different from Bitcoin in a way that it provides a platform to create smart contracts and distributed applications. A smart contract permits users to exchange anything that has value: property, shares, money, and so on.


In Bitcoin, transactions are validated by a method known as proof-of-work. It is also the same for Ethereum. With proof-of-work, miners try to solve complex mathematical problems, and once solved, a block is added to the blockchain. However, Ethereum is validated by a method called proof of stake. In this, an individual can mine or validate a block based on the number of coins he/she owns. The more coins one has, the more mining power one can possess.

In Bitcoin, every time a block is added to the blockchain, the miner is rewarded with 6.25 BTC. The rewards are calculated using the halving method i.e., the reward is expected to be halved every 210,000 blocks. In Ethereum, a miner is rewarded with 3 ETH every time a block is added to the blockchain, and it is never halved.


On average, it takes about 10 minutes for Bitcoin to add a block to the blockchain. Whereas for Ethereum it takes up to 12 to 15 seconds.

Number of tokens or coins

The total supply of BTC coins is limited to 21 million, and this number will never be increased. According to Coinmarketcap, the circulating supply is 18,706,993,00 BTC. After 2140, no new BTC coins will be created, which is why Bitcoin is referred to as a deflationary currency (opposite of inflation).

Ethereum’s supply is unlimited, but the annual supply is limited to 18 million ETH. At present, 115,830,604.37 ETH are in circulation.

Bitcoin vs. Ethereum: The Purpose

Bitcoin is a popular investment option these days as it has proved to be the most effective value storage mode. Also, more and more businesses are accepting BTC as a payment method like Tesla, Overstock.com, etc.

Ether is not as popular as BTC to buy goods and services. Currently, it is mainly used by developers to build applications. With time, Ether is expected to grow both in usage and value as more and more applications are developed using the network.

Bitcoin or Ethereum: Which one is Better?

The answer to this question depends entirely on your requirements. While, Bitcoin is the best peer-to-peer transaction system, and Ethereum works well in creating and building smart contracts and distributed applications. The decision is entirely yours to choose a winner between Bitcoin vs. Ethereum.

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