Skip to content

Ethereum Vs Bitcoin | Technical differences explained

Ethereum vs Bitcoin Technical Differences

Ethereum vs Bitcoin is one of the hottest debates in crypto world. Bitcoin and Ethereum are the two most popular cryptocurrencies. They both have separate blockchains as their underlying architecture supports them but there are some technical key differences between Ethereum and bitcoin architecture that sets them worlds apart. Bitcoin is only being used for financial transactions whereas Ethereum blockchain supports many different use cases in IoTs, supply chain management, healthcare etc due to its peculiar architecture. While Bitcoin is considered as the gold of cryptocurrencies, Ethereum is the silver of cryptocurrencies.

Technical Difference between Ethereum and Bitcoin 

The main technical difference between Ethereum and Bitcoin is that Bitcoin is only a distributed ledger that keeps an immutable track of all transactions whereas Ethereum is a virtual computer that is able to execute small codes that can support various applications on top of Ethereum Blockchain.
Let’s First See the technical Properties of Ethereum which sets it apart from Bitcoin.

Summary Ethereum vs Bitcoin

  • Bitcoin is purely designed to secure electronic transactions whereas Ethereum is designed as a platform for decentralized applications like DeFI, NFTs and DAOs,
  • Transactions are way faster in Ethereum than Bitcoin. A bitcoin transaction is confirmed in 60 minutes whereas Ethereum Transaction can be completed in 15 seconds to 5 minutes.
  • Bitcoin is not Turing complete. Ethereum is Turing complete which allows it to perform a variety of computations.
Ethereum Vs Bitcoin

What is Ethereum Virtual Machine

Ethereum Virtual Machine is a distributed virtual machine that lives on the Ethereum blockchain. Every Node on the blockchain contributes to the computational power to the virtual machine. The state of the EVM is kept by each participating node.EVM is able to execute small pieces of code called smart contracts which are like functions that we can call with different arguments or inputs.Any execution of code on EVM causes the state of the machine to change which is propagated to all nodes on the Ethereum blockchain.

What Is Ether?

Ether is the native cryptocurrency on the Ethereum blockchain. Ether is used to pay for any transaction of the Ethereum Blockchain. Ethereum virtual machine keeps a distributed ledger where all accounts and account balances are stored. The ledger is part of Ethereum virtual machine state. The smallest unit of Ether is called Gwei which is equal to 0.000000001 Eth.

What is a Gas fee on the Ethereum blockchain?

Gas fees is charged in Ether to hire the computational power on Ethereum Blockchain. The gas fee is important as it prevents the Ethereum network from malicious actors to execute code with an infinite loop. Users pay for the computational power as per their requirement which keeps the network going and motivates the nodes to dedicate computational power to the Ethereum Virtual machine. Gas fees are paid in Gwei as per the computational power required.

What is a smart contract on Ethereum Blockchain?

A smart contract is a small piece of code or a script that can be permanently deployed on the Ethereum blockchain. A smart contract allows different types of applications to be built on the Ethereum blockchain. Code once deployed as a smart contract can not be edited or changed. Users can call the code with different arguments to carry out their tasks. Smart contract code is public and anyone can view it.

Difference between Bitcoin and Ethereum Transaction

A transaction of Bitcoin Networks transfers cryptocurrency from one wallet to another wallet. But a transaction on an Ethereum Node means to execute a code on Ethereum Virtual Machine.The transaction on an Ethereum blockchain may perform one of the three things.

  • Transfer an Ethereum from one account to another account.
  • Deploy a Smart Contract on Ethereum Blockchain
  • Execute a code of the smart contract with a given input.

The difference in Applications of Bitcoin and Ethereum

Ethereum Blockchain is Turing Complete and supports various decentralized applications, DAOs, DeFI, NFTs, Crypto play to earn games and Web3 whereas Bitcoin is more focused on financial transactions and securing the financial sector. You can set up your own Ethereum Blockchain for intra Network applications as well.

Future of Bitcoin and Ethereum

Bitcoin and Ethereum are not going anywhere soon. While some have argued about the effects of mining on the environment and high energy consumption, there are still many applications that warrant the use of cryptocurrencies. Moreover, cryptocurrencies are moving towards other forms of mining protocols like proof of stake and proof of authority. Ethereum 2.0 is already in the development for last 3 years by Ethereum Developers and may be soon launched. Bitcoin is always going to be gold standard for monetary transactions due to inbuilt security and high PoW consensus protocols cost while other computations applications like DAOs, Web3 may switch to less expensive cryptocurrencies like Ethereum.


What is the main difference between Bitcoin and Ethereum?

The main difference between Bitcoin and Ethereum is that Ethereum is Turing complete whereas Bitcoin is not. Bitcoin is designed only for financial transactions whereas Ethereum supports various decentralized applications like NFTs, DeFi etc.

Is Ethereum Better than Bitcoin?

Ethereum can do a lot more than Bitcoin but it compromises a little bit of security to increase usability and speed of transactions. Bitcoin is designed to be the gold standard of financial transactions.

How much it take to complete a crypto transaction?

A Bitcoin transaction takes almost 60 minutes to be confirmed. Whereas an Ethereum transaction takes about 5 minutes to be confirmed.

What is Ethereum 2.0? how it will affect mining?

Ethereum 2.0 is being based on proof of stake and proof of authority algorithms significantly which will signifacntly reduce energy requirements for mining. Ethereum 2.0 is in working for more than 3 years to strike a balance between energy requirements and security.


Hassan is Telecommunications Engineer working in Web 3.0 Technologies. He has various IT certifications like CCENT, HCNA, HCNP and loves to write about new technologies

Leave a Reply

Your email address will not be published. Required fields are marked *