Bitcoin vs Ethereum
Bitcoin and Ethereum are the two most famous cryptocurrencies in the world. Although they are often mentioned in the same breath, they differ significantly in their purpose, technology, and use cases. In this guide, we deep dive into the Bitcoin vs Ethereum comparison and look at how they relate to each other based on technology, vision, usage, market capitalisation, and future perspective.
The main differences between Bitcoin & Ethereum
Bitcoin (BTC) and
Ethereum (ETH) share the foundation of blockchain technology, but their objectives are fundamentally different. Bitcoin was designed as digital cash, a decentralised alternative to traditional money that primarily serves as a store of value or a means of payment. Ethereum, on the other hand, is a platform for decentralised finance (DeFi) and non-fungible tokens (NFTs). Within that ecosystem, ETH acts as fuel for transactions and smart contracts.
Key differences at a glance:
| Feature | Bitcoin | Ethereum |
| Purpose | Digital Cash | Platform for Smart Contracts |
| Consensus Mechanism | Proof of Work | Proof of Stake |
| Launch | 2009 | 2015 |
| Block Time | ~10 minutes | ~12 seconds |
| Maximum Supply | 21 million | No fixed limit |
| Founder | Satoshi Nakamoto | Vitalik Buterin |
| Use Case | Store of Value, Payment | DeFi, NFTs, DApps |
What is Bitcoin?
Bitcoin is the first and most famous cryptocurrency. Developed in 2009 by the mysterious Satoshi Nakamoto, it was presented as an answer to traditional financial systems. Bitcoin uses blockchain technology to record transactions without the need for banks.
Bitcoin Advantages
Limited Supply: With a maximum of 21 million coins, Bitcoin is scarce, making it attractive as a digital counterpart to gold.
Decentralisation: No single party controls the network; it is completely peer-to-peer.
Secure and Robust: Thanks to the Proof of Work mechanism, the Bitcoin network is extremely difficult to attack.
Bitcoin Disadvantages
Slow Transactions: Due to the 10-minute block time, Bitcoin is less suitable for fast payments.
Energy Consumption: Proof of Work requires a lot of computing power, leading to high energy use.
Limited Functionality: Bitcoin is primarily intended as a means of payment and store of value, not as a platform for applications.
What is Ethereum?
Ethereum was launched in 2015 by Vitalik Buterin and introduced a revolutionary extension to blockchain technology: smart contracts. These allow developers to build applications that execute automatically when predefined conditions are met.
Ethereum Advantages
Smart Contracts: Users can create automated agreements and applications (DApps) themselves.
Innovative Ecosystem: Ethereum forms the basis of DeFi, NFTs, and countless Web3 projects.
Transition to Proof of Stake: Since the "Merge" in 2022, Ethereum has become more energy efficient and environmentally friendly.
Ethereum Disadvantages
No Fixed Supply: Unlike Bitcoin, Ethereum has no maximum supply.
Transaction Costs (Gas Fees): Costs can vary and sometimes run high during busy periods.
Complexity: Due to its versatility, Ethereum is technically more complex for new users.
The Creator of Bitcoin and the Creator of Ethereum
Satoshi Nakamoto (Bitcoin)
Satoshi Nakamoto is the pseudonym of the unknown person (or group) who designed Bitcoin. To this day, their identity remains unknown. Satoshi‘s vision was to build an independent monetary system without central banks.
Vitalik Buterin (Ethereum)
Vitalik Buterin, a young programmer from Russia-Canada, developed Ethereum when he was only 19 years old. His goal was to create a blockchain that could do more than just transfer value—namely, a platform where applications could run without third-party intervention.
The Vision Behind Bitcoin and Ethereum
Bitcoin focuses on monetary independence. It aims to offer an alternative to inflation-prone currencies and centralised banks. Ethereum, on the other hand, has a programmable vision: it wants to decentralise the internet through smart contracts and applications that can be used by everyone.
Proof of Work vs Proof of Stake
Bitcoin uses Proof of Work (PoW), where miners solve complex mathematical puzzles to verify transactions and add new blocks to the blockchain. This process requires significant computing power but ensures a highly secure network.
Ethereum switched to Proof of Stake (PoS) in 2022. In this system, users validate transactions by staking their ETH as collateral. This saves up to 99% of energy and makes the network more sustainable while remaining secure.
Market Cap of Bitcoin and Ethereum
Market capitalisation (market cap) shows how large a cryptocurrency is. Bitcoin is by far the largest, followed by Ethereum.
| Cryptocurrency | Market Cap (November 2025, estimated) | Percentage of Total Market |
| Bitcoin (BTC) | approx. $1.3 trillion | ~52% |
| Ethereum (ETH) | approx. $500 billion | ~20% |
How many Bitcoin are there?
There will never be more than 21 million Bitcoin in existence. Approximately 19.7 million are already in circulation. That means only a small fraction remains to be mined.
Ethereum‘s Inflation Model and Supply
Ethereum has no fixed limit, but due to the shift to Proof of Stake, the supply is even deflationary (shrinking) in some periods. This is because a portion of the transaction costs (gas fees) is burnt, which reduces the total supply.
What Do Bitcoin and Ethereum Have in Common?
Both run on blockchain technology.
They use cryptography to secure transactions.
They are fully decentralised, with no central authority.
Bitcoin and Ethereum both play a key role in the crypto market and are traded globally.
Buying Bitcoin or Ethereum?
Both Bitcoin and Ethereum can be interesting additions to a portfolio. The choice depends on your strategy:
Which fits your strategy?
Bitcoin: Suitable for those looking for long-term store of value and scarcity.
Ethereum: Ideal for those who believe in the future of Web3, smart contracts, and DeFi.
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Frequently Asked Questions
Why do people use Ethereum instead of Bitcoin?
Because Ethereum offers more applications than just storing value. It is used for DeFi platforms, NFT marketplaces, and smart contracts.
Can Ethereum beat Bitcoin?
Although Ethereum is technologically more versatile, Bitcoin remains the largest due to its market dominance and status as the first cryptocurrency.
What if you had bought £1,000 worth of Ethereum five years ago?
Five years ago (2019), ETH was around $180. In 2025, the price is well over $4,000, which would yield a return of more than 2,000%.
What if you had bought £1,000 worth of Bitcoin five years ago?
In 2019, Bitcoin was worth approximately $4,000. In 2025, the price is above $65,000, yielding a return of more than 1,500%.
Can Ethereum reach $100,000 before 2040?
No one knows for sure, but with the growth of Web3 and increasing adoption, it is not inconceivable that Ethereum will continue to rise in value. However, it remains important to do thorough research and only invest what you are willing to lose.