Table of Contents

What is Bitcoin and how did it emerge? 

What is Ethereum and how did it emerge? 

How Bitcoin and Ethereum are similar

How Bitcoin and Ethereum are different

The bottom line

LearnEthereumBitcoin vs. Ethereum: What’s the Difference?

Bitcoin vs. Ethereum: What’s the Difference?

Jun 21, 2022


6 min read

Bitcoin and Ethereum are the largest cryptocurrencies by a wide margin. Learn all about how they differ in several key ways as they were developed for different reasons.

Cryptocurrency is one of the buzziest investments of the past several years. The asset class went mainstream initially because of Bitcoin’s rapid rise, and as this market evolves it has continued to attract attention because of the massive volatility in the space, regulatory considerations, and emerging cryptocurrencies for different uses.

Bitcoin was the original crypto, and it remains No. 1 based on market capitalization by a significant margin. Consumers can use it to pay for goods and services at some merchants, and investors trade it like a stock.

The No. 2 crypto by market cap, Ethereum, is smaller than Bitcoin but much larger than the thousands of other cryptocurrencies in the field. Like Bitcoin, Ethereum is a digital currency that boasts high daily trading volume, and it runs on decentralized blockchain technology. But Ethereum offers additional features like smart contracts and is popular for buying non-fungible tokens (NFTs). Here’s how the cryptocurrencies Bitcoin and Ethereum are the same—and how they’re different.

What is Bitcoin and how did it emerge? 

Bitcoin became the first real crypto in 2009, created by an unidentified person or group using the alias Satoshi Nakamoto, Bitcoin began garnering mainstream interest around 2017 and ultimately charted a path for thousands of other digital assets.

The Bitcoin network is partly a response to the financial crisis and Great Recession of 2008. The traditional system is built on centralized authorities like governments and banks backing currencies, validating transactions, recording balances, and creating new money. And 2008 showed that the traditional system could fail.

So Bitcoin was built on the opposite philosophy: a decentralized financial system spread across thousands of computers around the world, with no central authority. Instead, computers on the network update with copies of the latest version of the Bitcoin network, so it would be nearly impossible for any single entity to shut it down.

Like most cryptos, Bitcoin (aka BTC) leverages blockchain technology, which is a public ledger that relies on complex cryptography to record every transaction. Anyone can look at these entries, and verified transactions cannot be altered.

Bitcoin uses proof of work (PoW), a consensus protocol that’s used to create, or mine, new tokens by requiring computers to solve complex math puzzles. It essentially means people can’t copy and paste tokens, confirming every transaction and new token is neither a duplicate nor a forgery. This process is leveraged to verify transactions, with multiple computers repeating the verification to reach consensus.

Bitcoin has surged in value during the past few years, topping $1 trillion in market cap for a few months in 2021. It’s also the crypto with the most mainstream appeal. For example, electronic-payments company PayPal lets customers buy Bitcoin via Venmo, electric-carmaker Tesla has bought Bitcoin, and big banks like Morgan Stanley are giving some of their customers access to Bitcoin investment funds.

What is Ethereum and how did it emerge? 


is a community-run network that powers its crypto, called Ether (ETH), and decentralized applications (DApps). Russian-Canadian programmer Vitalik Buterin created the system as a platform for developers to build their apps with more freedom, compared to Apple and Google taking a large cut off the top for purchases made on their app stores. 

Buterin and seven co-founders called it “the world's programmable blockchain,” through which users can send Ether and other cryptocurrencies. Its platform also includes a marketplace of financial services, games, and apps that “can't steal your data or censor you,” according to the Ethereum website.

The Ethereum network also launched the concept of smart contracts: programs that execute automatically, without human intervention or an intermediary, when agreed-upon conditions are met. This makes transactions and programs faster and cheaper, and they can be used for decentralized finance (DeFi), apps, and games in addition to enterprise contexts like supply-chain processes.

Like Bitcoin, Ether soared to all-time highs in 2021—partly because of its wide use to buy NFTs in the form of digital art, trading cards, and other collectibles. In March 2021, a piece by digital artist Beeple sold for a record-setting $69.3 million worth of Ether. Yet the crypto lost almost half its value from its 2021 peak to early 2022, highlighting the extreme volatility in this space.

At Titan, we are value investors: we aim to manage our portfolios with a steady focus on fundamentals and an eye on massive long-term growth potential. Investing with Titan is easy, transparent, and effective.

Get Started

How Bitcoin and Ethereum are similar

BTC and ETH share several features, particularly their underlying technology and core philosophies. Both leverage the blockchain and prize the transparency and anonymity it provides, as users are identified not by name but by the ID numbers of their digital wallets.

Both cryptos were born with the spirit of autonomy, as well: Bitcoin was in part a response to the 2008 financial crisis, while Ethereum is an alternative to major tech companies’ app development platforms.

Additionally, both Ethereum and Bitcoin were initially built on the proof of work consensus protocol.

How Bitcoin and Ethereum are different

The No. 1 and 2 cryptos differ in several key ways, as they were developed for different reasons—and aren’t designed to be competitors. 

  • Purpose.

    Bitcoin was created primarily as an alternative currency to fiat currencies, such as the dollar and yen, that are backed by a government and typically involve intermediaries. Though Ether can also be used as a store of value and the network can power financial transactions, it was really built to give app developers more freedom, allowing them to create on its marketplace of apps—an alternative to the Apple and Google app stores that take a sizable cut off the top for purchases on its platform.

  • Blockchain.

    The Bitcoin blockchain was built to trade only Bitcoin. The Ethereum blockchain, by contrast, is programmable and lets users trade all types of cryptocurrencies without having to visit other cryptocurrency exchanges.

  • Consensus protocol.

    Bitcoin still runs on the  proof of work consensus protocol. But Ethereum is changing: The community has long planned to change the algorithm underlying its blockchain, as PoW requires a lot of computational power and electricity. So Ether is switching to a newer protocol called proof of stake (PoS), which lets users validate the transactions on the network in exchange for a reward that’s paid in newly minted crypto. It’s done through a mechanism called a stake pool, or a server node that can hold the combined crypto of many users. A recent estimate says PoS could cut Ethereum’s energy consumption by 99.95%.

  • Circulation.

    Bitcoin has a scarcity principle baked in, as the amount of Bitcoin that will ever be in circulation is capped at 21 million. That limit is getting close: As of May 2022, more than 19 million Bitcoin were already in existence. For Ether, there’s no limit on the amount that can be created.

The bottom line

Bitcoin and Ethereum are the largest cryptos by a wide margin. Both run on blockchain technology, which is a decentralized system spread across thousands of computers that relies on complex cryptography to record every transaction. The ledger is public, and users are identified only by their crypto wallet ID numbers. The pair of cryptocurrencies share several features, as well as the core philosophies of autonomy, transparency, security, and anonymity, but they also differ.

The first “real” cryptocurrency was Bitcoin, and it has attracted widespread investor and consumer interest. It topped $1 trillion in market cap for a few months in 2021, and some merchants accept it as payment for goods and services. Its blockchain was built to trade only Bitcoin and runs on a proof of work consensus protocol.

Ethereum is a community-run network for trading Ether (ETH) and other cryptocurrencies, and it also offers a platform of decentralized applications to give app developers and users more freedom compared to other app stores. It’s called “the world's programmable blockchain,” and it also launched the concept of smart contracts that execute automatically when agreed-upon conditions are met. Ether, which is switching to a proof of stake protocol, is also the crypto of choice for buying NFTs like digital art pieces.


Certain information contained in here has been obtained from third-party sources. While taken from sources believed to be reliable, Titan has not independently verified such information and makes no representations about the accuracy of the information or its appropriateness for a given situation. In addition, this content may include third-party advertisements; Titan has not reviewed such advertisements and does not endorse any advertising content contained therein.

This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors, and may not under any circumstances be relied upon when making a decision to invest in any strategy managed by Titan. Any investments referred to, or described are not representative of all investments in strategies managed by Titan, and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results.

Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Please see Titan’s Legal Page for additional important information.

Three Things, a newsletter from Titan

Stay informed on the most impactful business and financial news with analysis from our team.

Cash Management

Smart Cash

Smart Cash FAQs

Cash Options

Get Smart Cash


© Copyright 2024 Titan Global Capital Management USA LLC. All Rights Reserved.

Titan Global Capital Management USA LLC ("Titan") is an investment adviser registered with the Securities and Exchange Commission (“SEC”). By using this website, you accept and agree to Titan’s Terms of Use and Privacy Policy. Titan’s investment advisory services are available only to residents of the United States in jurisdictions where Titan is registered. Nothing on this website should be considered an offer, solicitation of an offer, or advice to buy or sell securities or investment products. Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections are hypothetical in nature and may not reflect actual future performance. Account holdings and other information provided are for illustrative purposes only and are not to be considered investment recommendations. The content on this website is for informational purposes only and does not constitute a comprehensive description of Titan’s investment advisory services.

Please refer to Titan's Program Brochure for important additional information. Certain investments are not suitable for all investors. Before investing, you should consider your investment objectives and any fees charged by Titan. The rate of return on investments can vary widely over time, especially for long term investments. Investment losses are possible, including the potential loss of all amounts invested, including principal. Brokerage services are provided to Titan Clients by Titan Global Technologies LLC and Apex Clearing Corporation, both registered broker-dealers and members of FINRA/SIPC. For more information, visit our disclosures page. You may check the background of these firms by visiting FINRA's BrokerCheck.

Various Registered Investment Company products (“Third Party Funds”) offered by third party fund families and investment companies are made available on the platform. Some of these Third Party Funds are offered through Titan Global Technologies LLC. Other Third Party Funds are offered to advisory clients by Titan. Before investing in such Third Party Funds you should consult the specific supplemental information available for each product. Please refer to Titan's Program Brochure for important additional information. Certain Third Party Funds that are available on Titan’s platform are interval funds. Investments in interval funds are highly speculative and subject to a lack of liquidity that is generally available in other types of investments. Actual investment return and principal value is likely to fluctuate and may depreciate in value when redeemed. Liquidity and distributions are not guaranteed, and are subject to availability at the discretion of the Third Party Fund.

The cash sweep program is made available in coordination with Apex Clearing Corporation through Titan Global Technologies LLC. Please visit for applicable terms and conditions and important disclosures.

Cryptocurrency advisory services are provided by Titan.

Information provided by Titan Support is for informational and general educational purposes only and is not investment or financial advice.

Contact Titan at 508 LaGuardia Place NY, NY 10012.