How Is Ethereum Blockchain Different From Bitcoin’s Blockchain?

Difference in Ethereum Blockchain and Bitcoin's Blockchain

Bitcoin and Ethereum are two cryptocurrencies that need no introduction for anyone active in the cryptosphere.

However, if you are new to the ecosystem, you will definitely ponder over what makes Bitcoin and Ethereum different when both of them are blockchains.

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Well, the answer is simple but difficult to explain. I will still go ahead with it and try to throw some light on it. But before I tell you more about the difference between Bitcoin and Ethereum blockchains, I would highly recommend you go through the links below. These will give you a fair idea about the two cryptocurrency giants.

Now that you have read the aforementioned articles, I am assuming you have a fairly good idea of both cryptocurrencies. Let us now get into the specifics of each blockchain and see what makes them different.

Bitcoin: Money Uncensored

Bitcoin is the world’s first fully-functional cryptocurrency that is truly decentralized, open-source and censorship-resistant. It was invented by Satoshi Nakamoto in 2008-2009 as a peer-to-peer electronic cash system to give the world an alternative to the traditional banking system.

Satoshi wanted to make things simple and that is why he made Bitcoin’s protocol or Bitcoin’s blockchain just well enough and perfect to store, handle and perform Bitcoin’s all transactions since the very start of the network.

In other words, Bitcoin’s blockchain is a worldwide shared ledger that ensures easy accounting and transfer of value (i.e. money) in the form of bitcoins.

This ‘Bitcoin’ is created by a process called mining and is held on Bitcoin’s blockchain. Also, unlike traditional money, you can send Bitcoin money to anyone and anywhere without seeking permission from banks or governments. (Read about Bitcoin mining here)

Bitcoin’s blockchain doesn’t care whether you are a human or a machine. Thousands of Bitcoin nodes on the blockchain are equally able to verify the legitimacy of payments independently and that’s why there is no need for any third party intermediaries like banks.

So you see Bitcoin or its Blockchain is purely money that can’t be censored.

Update: Bitcoin has implemented segwit and Lightning network is on the rolling for more scalability that is must need to compete with other payment methods.

Ethereum: More Than Just Money

First things first. Ethereum is not purely digital money but it doesn’t mean that you cannot transact on that blockchain. You can, but you need to understand what those transactions are for (I am going to explain that further in this article).

Ethereum’s blockchain can handle accounts and transactions like Bitcoin’s blockchain but can also store and execute newly coded programming logic.

For a better understanding of ‘programming logic’, let us take an example:

  • On May 8, transfer $Y from A’s account to B’s account if A’s account has more than $X. If not, don’t transfer $Y to B’s account.

And these types of logical codes are written, executed, and are stored historically on the Ethereum blockchain forever for future reference.

Ethereum is different from Bitcoin mostly because with Ethereum you can not only transfer money (i.e. Ether) but you can also execute smart contracts and make DApps. (See our detailed guide on smart contracts and DApps here).

All of this is done on Ethereum Virtual Machine (EVM) with the help of Ethereum’s native programming language Solidity. The inbuilt programming language Solidity is used to write smart contracts and DApps. Post that, the cryptocurrency asset (Ether) helps in executing these apps and contracts.

This is why Ethereum is also called programmable money.

Therefore, Ethereum is not just a blockchain for transacting money. Instead, it is a decentralized programmable blockchain-based software platform that its married to its cryptocurrency asset (called Ether – ETH) which runs the Ethereum network.

Update: Ethereum is right now wrestling to update its network for higher scalability by implementing Casper Protocol. Earlier last year the Ethereum network struggled from processing transactions from even a game like CryptoKitties.

Usage Of Ethereum

There are a lot of real-world scenarios where we trust third parties, middlemen, and escrow agents to enforce the transaction. In this way, they all earn their cut. With Ethereum’s blockchain, such parties will become useless as the technology matures.

Some of these are Uber (which I explained in introductory Ethereum article), freelancing platforms like Upwork, Insurance Agents, Escrow agents, eBay, and Airbnb (to name a few).

If a replica of these above applications is made on the decentralized Ethereum platform, it will result in the following advantages and a positive disruption of each industry:

  1. Elimination of the possibility of a single point of failure or control.
  2. Remove traction and make the process faster.
  3. Reduced cost as the middlemen will be removed.

Some More Insight on Ethereum…

Another aspect to understand is Ethereum is more of a company that has co-founders and executives. And this has solidified further with the formation of EEA-Enterprise Ethereum Alliance, (the details of which I have already explained).

It is actually funny to call Ethereum a currency because money doesn’t have CEOs, founders or co-founders. It is like saying USD or EUR has co-founders and CEOs or executives. Kinda odd, isn’t it?

Instead, one can call it a decentralized platform for running DApps and smart contracts that get fueled by a cryptocurrency (Ether) that has some market value. I think this makes more sense in my opinion.


In my opinion, Ethereum is fundamentally different from Bitcoin. Ethereum and Bitcoin are not competitors. They coexist and solve different types of problems in the real world and open up a possibility for a new future.

However, this may soon change when Bitcoin develops other capabilities of Ethereum with the launch of RSK network.


RSK is the first open-source smart contract platform with a 2-way peg to Bitcoin that also rewards the Bitcoin miners via merge-mining, allowing them to actively participate in the Smart Contract revolution. RSK goal is to add value and functionality to the Bitcoin ecosystem by enabling smart-contracts, near instant payments and higher-scalability.

With this launch, Bitcoin may also start breeding DApps, smart contracts, and Kickstarter ICOs which may make Ethereum a little less relevant.

But wait! That is not me making any predictions because in this crazy blockchain and crypto world anything is possible in the blink of an eye.

We really need to wait and watch to see the real effects of Bitcoin and Ethereum’s evolution from this moment on.

But until then, I urge you to educate yourself about this beautiful tech of crypto and blockchain and enjoy this video to understand more about what sets Bitcoin & Ethereum apart.

To stay up to date, subscribe to CoinSutra and keep learning about the blockchain revolution!

Also, if you find this post informative, kindly share it with your friends and crypto enthusiasts!

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