Bitcoin vs. Ethereum: The Complete Guide (2025)

Bitcoin and Ethereum are the World’s Two Most Popular Layer-1 Blockchains

Bitcoin and Ethereum are the two most dominant blockchains in the world and the two largest cryptocurrencies by market cap. While Bitcoin is the first and largest cryptocurrency, Ethereum is the second-largest. However, while Bitcoin remains the undisputed leader as a digital store of value, Ethereum has revolutionized the blockchain industry with smart contracts and decentralized finance (DeFi) applications.

Unlike Ethereum, Bitcoin prioritizes security and decentralization over speed and scalability, making it an ideal choice for long-term investors and institutional adoption. On the other hand, Ethereum, with its robust smart contract capabilities, is the backbone of DeFi, NFTs, and Layer-2 solutions. 

In this article, we’ll analyze Bitcoin vs. Ethereum across multiple aspects, including founders and history, tokenomics, scalability, network security, DeFi TVL, and real-world adoption.

In this article, we’ll discuss some of the key aspects of both the Bitcoin and Ethereum blockchains, including their founders and history, token and tokenomics, scalability and performance, architecture and consensus, programming languages, DeFi TVL, GameFi and SocialFi use cases, and NFT implementations. 

Founders and History 

Bitcoin

Bitcoin was created by the anonymous person or persons known as Satoshi Nakamoto in 2008. Specifically, Bitcoin was introduced through a whitepaper titled “Bitcoin: A Peer-to-Peer Electronic Cash System.” The first Bitcoin block, known as the Genesis Block (Block 0), was mined on January 3, 2009.

Bitcoin’s primary goal was to provide a decentralized and censorship-resistant financial system, allowing users to transact without intermediaries like banks. Unlike Ethereum, Bitcoin has a fixed supply of 21 million BTC, making it a scarce digital asset often referred to as “digital gold.”

Unlike Ethereum, Bitcoin has never undergone a fundamental shift in its consensus mechanism and continues to operate under Proof-of-Work (PoW), securing the network through its global network of miners. The Proof-of-Work (PoW) relies on computers, referred to as “miners,” which solve increasingly complex mathematical equations in order to earn the right to “mine” the next block by validating (approving) a transaction on the Bitcoin network.

While Bitcoin could be “mined’ on laptops and PCs in the early years, by 2013, most mining had switched to professional-grade ASICs.  An ASIC (Application-Specific Integrated Circuit) is a specialized computer chip engineered to perform one particular task with extraordinary efficiency—in Bitcoin mining, it’s specifically designed to process the SHA-256 algorithm as swiftly as possible. 

Ethereum

Ethereum was founded in 2013 by Vitalik Buterin. The project’s co-founders included future crypto heavyweights Gavin Wood, Charles Hoskinson, and Joseph Lubin, who would respectively go on to found Polkadot, Cardano, and Consensys. Ethereum, which launched its mainnet in 2015, was the first blockchain to offer smart contracts, meaning that decentralized applications (dApps) could be built on it rather than just permitting payments, as Bitcoin had. In this way, Ethereum revolutionized the crypto and blockchain industry by transitioning the focus away from digital payments to a global, decentralized internet. 

Like Bitcoin, Ethereum was initially a proof-of-work blockchain, requiring energy-intensive miners to validate transactions. However, in September 2022, Ethereum transitioned its consensus mechanism to proof-of-stake (PoS) in a process known as “The Merge,” reducing the blockchain’s energy usage by more than 99%. 

Token and Tokenomics 

Bitcoin (BTC)

The native cryptocurrency of the Bitcoin network is Bitcoin (BTC). As the first cryptocurrency, all other cryptocurrencies have, in some way, been inspired by Bitcoin. Bitcoin is used for transaction fees, as a payment method, and a store of value. Since Bitcoin is a proof-of-work blockchain governed by nodes, unlike ETH, Bitcoin is not used for governance or staking on the core Bitcoin blockchain. While there are unrelated DeFi staking products that allow users to stake Bitcoin for rewards, they have no influence over the governance or supply of Bitcoin itself. 

Bitcoin is capped at a maximum supply of 21 million BTC, and, as of the writing of this article, had a circulating supply of 19.9 million BTC. Approximately every four years, Bitcoin undergoes a “halving,” meaning that the block rewards provided to miners who validate a transaction are cut by 50%. This means that Bitcoin’s inflation rate is cut by 50% about every four years. At the current rate, it’s estimated that the last Bitcoin will be mined in the year 2140. 

Ethereum (ETH) 

Ethereum’s native token is ETH. The ETH token is utilized for purposes including transaction fees, staking, and protocol governance. 

ETH does not have a maximum supply. As of the writing of this article, 120.7 million ETH were in circulation. New ETH is created to reward validators, but to reduce the total supply, a part of each transaction fee is burned by sending it to a designated address where it cannot be retrieved. As of Q3 2025, the annual inflation rate for ETH was approximately 0.35%. 

Scalability and Performance

Bitcoin

Bitcoin TPS, Q2 2025. Source: Blockchain.com. 

While Bitcoin may be the first cryptocurrency, it still faces significant challenges when it comes to speed and scalability. Bitcoin processes roughly 4–5 transactions per second (TPS) on average, and each block takes around 10 minutes to confirm—though actual times can fluctuate between 7 to 14 minutes. Many users also wait for multiple confirmations for added security, extending real-world finality to about an hour. These factors can limit Bitcoin’s capacity to handle large-scale adoption and high transaction volumes.

To overcome these limitations and improve efficiency, Bitcoin Layer-2 solutions such as the Lightning Network have gained increasing traction. Other popular Bitcoin L2s include Stacks, Merlin Chain, and Rootstock. 

By operating off-chain while still anchoring to Bitcoin’s main blockchain, these Layer-2 protocols significantly enhance transaction throughput and reduce congestion. As a result, Bitcoin retains its robust security and global recognition while evolving into a faster, more scalable ecosystem for everyday transactions.

Ethereum

Ethereum TPS, Jan. 2016 to Jan. 2025. Source: Dune Analytics. 

While it may have been the first popular blockchain for smart contracts, Ethereum’s main issue has been its speed and scalability. 

According to data from Blockworks and Dune Analytics, Ethereum, over the last several months, Ethereum has had an average TPS of around 13. Ethereum.org says that Ethereum blocks reach finality in around 15 minutes, though other sources claim finality is slightly faster, averaging about 13 minutes. 

These incredibly slow speeds have led to an explosion in Ethereum Layer-2s, which operate on top of the main Ethereum blockchain and inherit its security but use various methods to increase the speed and scalability of transactions. Popular Layer-2s include Optimism, Arbitrum, and Base, which are much faster than the Ethereum mainnet. 

However, Ethereum itself has a long-term plan called “The Surge.” Much like “The Merge” changed the blockchain by reducing its energy usage by 99%+,  “The Surge” would radically revamp parts of Ethereum’s network architecture to allow both the Ethereum mainnet and L2s to reach 100,000 TPS or more. However, it’s unclear exactly when this plan will be implemented. 

Network Metrics

Over a recent three-month sampling period from early December 2024 to early March 2025, Bitcoin and Ethereum both saw a high number of daily active addresses, a significant amount of daily transaction fees, and a large number of daily transactions. 

Bitcoin

• Daily Active Addresses: Ranges from 614,651 to 1,069,565  
• Daily Transaction Fees: Fluctuates between $337,580 and $2,330,110
• Daily Transaction Count: Ranges between 574,814 and 264,912 

Ethereum

• Daily Active Addresses: Ranges from 343,271 to 500,985 
• Daily Transaction Fees: Fluctuates between $588,083 and $12,671,443
• Daily Transaction Count: Ranges between 1,121,706 and 1,356,631

In general, we can safely say that while Bitcoin has a larger number of daily addresses, Ethereum brings in significantly more daily transaction fees and has a much larger daily transaction count. This can be attributed to the fact that Ethereum hosts smart contracts 

However, it’s essential to realize that this only looks at the Ethereum mainnet, not the vibrant system of L2s that have sprung up around the Ethereum ecosystem. For example, L2BEAT, a popular data aggregation website for Ethereum L2s, lists more than 146 L2s, including 59 rollups, 87 validiums and optimiums. Combined, Ethereum and these L2s had a daily transaction count of closer to 30 million over the last month. 

While Bitcoin L2s also bring users into the broader Bitcoin ecosystem, they don’t come anywhere close to the users generated by Ethereum Layer-2s. Unfortunately, recent user count data is quite difficult to come by for Bitcoin L2s compared to Ethereum L2s. However, September 2023 data suggests that the number of monthly users on the Bitcoin Lightning network, one of the most popular Layer-2s, was between 279,000 to 1,116,000. 

Architecture and Consensus  

BTC node concentration map, Q2 2025. Source: Bitnodes. 

Bitcoin

As we discussed earlier in this article, Bitcoin relies on a Proof-of-Work (PoW) consensus mechanism, securing the network through its global network of miners. The Proof-of-Work (PoW) relies on computers, referred to as “miners,” which solve increasingly complex mathematical equations in order to earn the right to “mine” the next block by validating (approving) a transaction on the Bitcoin network. 

Data from the website Bitnodes suggests that there are currently 21,397 Bitcoin nodes operating worldwide, with the majority of identifiable nodes operating in the U.S., Germany, France, Finland, Canada, Netherlands, the U.K., Switzerland, and Russia. 

Bitcoin hashrate distribution over the previous 12 months, Q2 2025: Source: Blockchain.com. 

As seen in the graphic above, the majority of Bitcoin’s hashrate from Q2 2024 to Q2 2025 was controlled by a few core mining pools, including AntPool (22%), FoundryUSA (15%), and ViaBTC (13%), and little has changed since then. 

Ethereum

Ethereum is a monolithic, Layer-1, proof-of-stake network. Ethereum validators use the network’s native ETH token to pay network transaction fees, earn staking rewards, and vote on decisions. 

There are currently more than 1 million Ethereum validators around the world. An Ethereum validator is a Beacon Chain address with a balance equal to or greater than 32 ETH at the execution layer that is responsible for proposing and verifying blocks of transactions. 

In contrast, a node operator runs the infrastructure of the Ethereum network, helping manage nodes. According to Etherscan’s Ethereum Node Tracker, as of the writing of this article, there are currently 5,935 Ethereum nodes distributed around the world, with 60% of them in the U.S. 

ETH stakers by percentage stake, Q2 2025. Source: Dune Analytics. 

In the above graphic, we can see that Ethereum staking isn’t quite as centralized as Bitcoin mining, though Lido (27.4%), Coinbase (8.4%), and Binance (6.2%) are still dominant players. Unlike Bitcoin, where nodes vote on changes to the network, while miners validate transactions, Ethereum, nodes both stake ETH and validate transactions.  

Programming Language 

Bitcoin

Bitcoin’s core protocol is primarily written in C++, chosen for its performance, security, and memory control. However, developers also use Python, Go, and Rust for Bitcoin-related applications, wallets, and scaling solutions like the Lightning Network.

Ethereum

Ethereum uses the Solidity programming language as its primary language. Solidity is similar to JavaScript, though there are slight differences. 

DeFi TVL 

Bitcoin

As of Q3 2025, Bitcoin supported a variety of DeFi dApps and had nearly billions of DeFi TVL (total value locked). Some of the top protocols by TVL included Babylon, Lombard, and SolvBTC LSTs. 

• Babylon enhances blockchain security by enabling Bitcoin holders to stake their BTC directly, thereby securing Proof-of-Stake (PoS) chains without relying on third-party custodians or complex bridging mechanisms. By integrating Bitcoin’s robust Proof-of-Work (PoW) security model, Babylon aims to bolster the integrity of PoS networks, addressing vulnerabilities such as long-range attacks and improving overall decentralization.
• ​Lombard is a restaking protocol that transforms Bitcoin into a productive asset by introducing Liquid Bitcoin (LBTC), a token backed 1:1 by staked BTC. This innovation allows Bitcoin holders to earn staking rewards while maintaining liquidity for use across decentralized finance (DeFi) platforms. By leveraging the Babylon Bitcoin staking protocol, Lombard enhances the supply side of Babylon’s two-sided security market, promoting broader adoption among Proof-of-Stake (PoS) networks. ​
• SolvBTC Liquid Staking Tokens (LSTs) protocol by Solv Protocol enables Bitcoin holders to stake their BTC and receive SolvBTC tokens, maintaining liquidity while earning staking rewards. These tokens can be utilized across various decentralized finance (DeFi) platforms, enhancing Bitcoin’s utility within the DeFi ecosystem. 

Ethereum

Ethereum also supports a wide array of DeFi dApps and has billions of DeFi TVL (total value locked). A few of the top protocols by TVL include AAVE, Lido, and EigenLayer. 

• AAVE is a highly popular decentralized lending protocol that allows people to borrow, lend, and earn interest on crypto, all without a middleman. AAVE is governed by the popular AAVE token.
• Lido is a liquid staking protocol allowing users to earn staking rewards on ETH. Lido used to allow staking for Polygon’s MATIC token, but this has been phased out. Lido is governed by the protocol’s native token, LDO. 
• EigenLayer was the first popular Ethereum protocol to introduce restaking. Restaking lets users stake the same tokens on the main blockchain and other protocols, securing multiple networks simultaneously. This increases staking rewards, though it can also increase slashing risk. EigenLayer is governed by the protocol’s native token, EIGEN. 

GameFi

Rollercoin, a popular game that offers Bitcoin rewards.

Bitcoin

​Bitcoin’s integration into gaming has been evolving slowly, particularly through Layer 2 solutions like the Lightning Network, which enables faster and more cost-effective transactions. However, the Bitcoin GameFi ecosystem is still significantly smaller than that on Ethereum, most Ethereum Layer-2s, or other popular L1s like Solana, often due to speed and file storage constraints. However, some of the most popular blockchain games that brand themselves as Bitcoin games* include LandRocker Bitcoin Hunt, Rollercoin, and Turbo 84. 

• LandRocker Bitcoin Hunt is a first-person shooter (FPS) game where players can earn Bitcoin by participating in in-game activities. Developed by Satoshis Games Inc., the game integrates Bitcoin rewards directly into the gameplay, allowing players to collect satoshis (the smallest unit of Bitcoin) by finding them within the game environment.
• ​RollerCoin is a free-to-play online crypto mining simulator that gamifies the cryptocurrency mining experience, allowing players to build virtual mining farms and earn real cryptocurrencies like Bitcoin, Ethereum, and Dogecoin. Since its launch in 2018, RollerCoin has attracted over 4 million players. 
• Turbo 84 is a high-speed, lane-changing game developed by THNDR Games, where players navigate a car through a highway, dodging obstacles to collect purple THNDR tickets and blue tokens. The tickets enter players into daily draws to win Bitcoin rewards, while the tokens serve as in-game currency for purchasing power-ups and new vehicles. 

*These games are branded as “Bitcoin games” but unlike true GameFi games, it does not appear that they are decentralized or built on top of the actual Bitcoin blockchain or a Bitcoin L2. 

Ethereum

Decentraland is one of the most popular games on the Ethereum blockchain. 

In contrast to Bitcoin, which has limited GameFi adoption, Ethereum is one of the most popular blockchains for virtual games and hosts multiple popular GameFi dApps, including CryptoKitties, The Sandbox, and Decentraland. 

• CryptoKitties is a highly popular NFT-based collectible game. According to the official website, “CryptoKitties is a game centered around breedable, collectible, and oh-so-adorable creatures we call CryptoKitties! Each cat is one-of-a-kind and 100% owned by you; it cannot be replicated, taken away, or destroyed.” 
• The Sandbox is a viral land-based NFT game. According to the official website, “The Sandbox is a virtual Metaverse built on the Ethereum blockchain, where players can build, own, and monetize their gaming experience.” The Sandbox gaming ecosystem is governed by the $SAND token. 
• Decentraland is another popular virtual land game and a competitor to The Sandbox. According to the official website, “Decentraland is a social virtual world where you can connect, explore, and create. Meet new friends, join events, and make memories—no matter where you are.” Decentraland is managed by the Decentralized Foundation, which is governed by the $MANA token. 

Despite the popularity of games on Ethereum, speed and graphics issues have been a problem. In recent years, many games have shifted to Ethereum sidechains like Polygon, as well as Layer-2s and non-Ethereum Layer-1s. 

SocialFi

Bitcoin

As of Q3 2025, it does not appear that there are any social dApps built directly on the Bitcoin blockchain or on any Bitcoin Layer-2s. 

Ethereum

In contrast to Bitcoin, Ethereum is a popular chain for social dApps. Some of the top SocialFi apps on Ethereum include Friends With Benefits, Lens Protocol, and Roll. Friends With Benefits (FWB) is a token-based social network that blends community engagement with decentralized finance. By leveraging Ethereum’s smart contracts, FWB rewards members with native tokens for participating in exclusive events and collaborative projects. 

Lens Protocol offers a decentralized social graph that empowers users to fully own their digital identity and data. It enables creators to publish, interact, and curate content without intermediaries, ensuring secure and censorship-resistant social networking. Similarly, Roll facilitates the creation and management of social tokens, allowing influencers and communities to directly monetize engagement through blockchain-based rewards. 

NFTs 

Bitcoin

Total sales volume and sales for Bitcoin NFTs as of mid-Q2 2025. Source: CoinMarketCap. 

Bitcoin came extremely late to the NFT party, with Bitcoin Ordinals (Bitcoin’s version of NFTs) first being launched by developer Casey Rodarmor on January 20, 2023. 

Bitcoin Ordinals have become quite popular, but they’re still nowhere near the popularity of NFTs on Ethereum or even Solana. The most expensive Bitcoin NFT, Honey Badgers Ordinals Inscription #8 was sold for approximately $450,000 in December 2023. 

According to data from CoinMarketCap, as of early March 2025, the total sales volume of all Bitcoin Ordinals is nearly $1.6 billion, compared to more than $129 billion for all Ethereum NFTs. 

Ethereum

Total sales volume and sales for Ethereum NFTs as of Mar. 6, 2025. Source: CoinMarketCap. 

In contrast to Bitcoin, Ethereum birthed the NFT craze in 2017 when popular collections like CryptoKitties were launched. By 2022, NFT sales and transaction volumes on Ethereum had peaked. Famous sales at the height of the NFT craze included the $23 million sale of CryptoPunk #5822 in February 2022. 

With the crypto bull run of 2024 and early 2025 leading to massive surges in crypto prices, interest in NFTs (and NFT prices) has rebounded somewhat, though overall volume still isn’t anywhere near where it was back in 2021 and early 2022. 

Where to Buy Tokens 

If you want to participate in the future of either the Bitcoin or Ethereum blockchains, you can easily buy BTC or ETH from almost any centralized exchange. However, when it comes to DEXs, fewer support Bitcoin. 

Top Bitcoin DEXs include Dexalot, Balanced, ViteX, DeFi Chain DEX, THORChain, and GMX (Avalanche). 

In contrast, top Ethereum DEXs include Curve, PancakeSwap, Osmosis, Pangolin, Dexalot, DeGate, and THENA FUSION. 

Frequently Asked Questions:

1. Bitcoin vs. Ethereum: Which is Better? 

Bitcoin and Ethereum are powerful and popular blockchain ecosystems, but each has benefits and drawbacks. 

As the first cryptocurrency, Bitcoin leads when it comes to security, popularity, liquidity, and consideration as a long-term investment and a store of value..

In contrast, Ethereum leads from a utility standpoint, as it functions as a “decentralized internet” and hosts thousands of popular decentralized applications (dApps), including decentralized exchanges (DEXs), borrowing and lending protocols, blockchain games, decentralized social networks, and other types of innovative decentralized applications. 

2. What are the main differences between Bitcoin and Ethereum?

The main differences between Bitcoin and Ethereum lie in their speed, consensus mechanisms,  programming languages, and smart contract capabilities. For example: 

• Bitcoin has an average of 4-7 TPS, while Solana has an average closer to 13 TPS. 
• Bitcoin uses the C++ programming language, while Ethereum uses Solidity. 
• Bitcoin uses a proof-of-work (PoW) consensus mechanism, while Ethereum uses a proof-of-stake (Pos) mechanism. 
• Bitcoin does not natively support smart contracts, while Ethereum was specifically designed to support smart contracts and decentralized applications (dApps). 

3. What challenges do Bitcoin and Ethereum face?

Bitcoin may face challenges due to concerns over the energy consumption of miners, new forms of decryption (like quantum computers) posing security challenges, and concerns that Bitcoin, while perhaps a great store of value, offers comparatively little utility to users when compared with chains like Ethereum or Solana. 

In contrast, Ethereum may face challenges due to its low speeds, high gas fees, and slow finality times, and these issues could lead to even more competition from faster, more scalable L1s like Solana. 

4. What are the pros and cons of the Ethereum and Solana blockchains? 

Bitcoin and Ethereum both have various pros and cons, which we’ll detail below. 

Bitcoin Pros: 

• Higher market cap 
• More secure consensus mechanism (at least in theory) 
• Limited supply of 21 million coins makes it inherently deflationary (at least in theory) 
• Extremely low inflation rate 
• More institutional investment than any other crypto (i.e., 24 U.S.-listed BTC-related ETFs as of mid-Q2 2025)  

Bitcoin Cons: 

• Not well-equipped for smart contracts and decentralized applications (dApps)
• Extremely slow transaction times 
• Bitcoin mining is energy intensive and likely environmentally destructive 
• Difficulty upgrading network infrastructure 
• Possible future security threats from quantum decryption 

Ethereum Pros: 

• Largest blockchain for smart contracts, dApps, and DEXs 
• Largest blockchain for stablecoins (like USDC, USDT, and USDS)  
• Most secure proof-of-stake blockchain (at least in theory) 
• Largest developer community in blockchain 
• Most popular blockchain for NFTs 
• Thriving, fast-growing L2 ecosystem 

Ethereum Cons:

• Higher volatility than Bitcoin   
• Facing competition from Solana, Sui, and even Ethereum L2s 
• Speed issues, low TPS, and slow finality (though better than Bitcoin)
• High gas fees make transactions expensive 
• Slightly institutional investment (i.e., 21 U.S.-listed Ether-related ETFs as of mid-Q2 2025, but many also hold BTC in much higher proportions)   

5. Can ETH flip BTC? 

​The concept of “The Flippening” refers to Ethereum (ETH) potentially surpassing Bitcoin (BTC) in market capitalization. Historically, Ethereum’s market cap peaked at $571.67 billion on November 9, 2021. Despite Ethereum’s growth, it remains significantly behind Bitcoin, making the likelihood of a near-term flippening uncertain.​ 

6. Which cryptocurrency is better for investors, BTC or ETH? 

While we can’t give specific investment advice, and all crypto investing is risky, many crypto analysts would suggest that BTC may be a more secure but lower-growth token due to its long history, limited supply, relatively large market cap.

In contrast, some analysts would suggest that ETH has higher growth potential due to its relatively smaller market cap and greater degree of utility, since it can host smart contracts and DeFi dApps significantly more easily than Bitcoin can. 

Still, investors may experience higher volatility if they invest in ETH. In addition, ETH is facing increasing competition from faster and more scalable Layer-1s, like Solana and Sui, as well as its own Layer-2s, like Arbitrum and Optimism. 

Either way, investors should not place money into cryptocurrency investments they cannot afford to lose.