How are Ethereum Blockchain and Bitcoin Blockchain Different From One Another?

Bitcoin and Ethereum are perhaps two of the most common names we keep hearing in the crypto scene. Given the cryptocurrencies of these two blockchain networks: namely, Bitcoin (BTC) and Ether(ETH) are the top two digital currencies of the market (as per values at the time of this article going to press), it seems worthwhile to have a look at how the blockchain networks underlying them function. Both these blockchain networks have varied aims and functions and it would be rather interesting to have a look at all the differences they have. Let’s have a look at the key one.

Rate of Issuing Currency and Creating Blocks

Ethereum manages to issue fresh tokens at a much faster rate than Bitcoin, churning out 720 Ethers every hour while Bitcoin manages just 75 during the same time frame. Likewise, while Bitcoin makes one block in 10 minutes, Ethereum achieves the same in just about 15 seconds.


Bitcoin has a built in language for scripting although it can be used for a very small number of operations, numbering to around 12. Ethereum, on the other hand, has integrated into its blockchain a general-purpose, Turing-complete language. Ethereum’s language abilities make it possible for the blockchain to host smart contracts, which disburse funds or stipulated payouts based on fulfilment of pre-set conditions.

Transaction Cost

Bitcoin blockchain decides on the cost of every transaction based on its size. However, Ethereum works differently, choosing to accrue a cost (called “gas”) every time some operation is carried out on the blockchain or storage is utilised.

Block Size

Bitcoin has blocks that cannot exceed 1 megabyte in total size. Ethereum, however, decides on the limit based on the gas that has been incurred, considering all costs of the operations within a single block. Practically, this translates to having 4 transactions each second for Bitcoin and 15 for Ethereum.

Hashing Algorithm

The two blockchain networks have very different hashing algorithms. Bitcoin uses the SHA-256 algorithm while Ethereum makes use of the KECCAK-256 algorithm. Bitcoin’s one can carried out quite effectively and a high degree of efficiency by ASICs or application specific integrated circuits. On the other hand, Ethereum’s one is much more difficult to use, as one can hardly build a special-purpose chip for it that is also cost-effective and economical. As a result of this difference, Ethereum has a greater degree of decentralization in mining.

Currency Cap

Bitcoin blockchain will churn out BTC tokens only till it reaches the mythical mark of 21 million but Ethereum has a much more pliant cap.

Consensus Algorithm

Both of them currently follow similar consensus models of the Proof of Work variety but Ethereum has been planning to make a move to the Proof Of Stake algorithm instead sometime soon. Every blockchain network needs a consensus algorithm to be able to achieve unanimity in opinion to validate transactions and update the digital ledger. Now Proof of Work algorithm takes computational power into account. The higher the amount of hardware resources a person dedicates, the greater chance does he/she have to be the next validator for the network. On the other hand, PoS bases this right on the consideration of how many tokens a given user has staked. Ethereum,with its tokens (rather than the currencies that BTCs exclusively are) can be extremely well-suited to PoS and this could possibly contain concerns about the energy efficiency of crypto mining, as seen in a recent Tweet and a subsequent Reddit thread as well.