Basics · Explainer
Bitcoin vs Ethereum: The Differences a Beginner Needs to Know
Bitcoin vs Ethereum explained for beginners: what each network is for, how new coins are made, which coin pays fees and what changes when you withdraw.
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- How2BuyCrypto Editorial
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- Updated
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- 5 min read
Written with AISources checked How our guides are made
At a glance
- Bitcoin and Ethereum are separate networks with separate coins. BTC needs a Bitcoin address and ETH an Ethereum one, so match both before you withdraw.
- Bitcoin fees are paid in BTC and depend on transaction size. Ethereum fees are paid in ETH, so keep some ETH for any Ethereum send.
- Bitcoin addresses start with 1, 3 or bc1. Ethereum addresses start with 0x and have 42 characters; one 0x address can appear on several networks.
- Neither supply rule tells you where a price will go. Both coins can lose value, and Ethereum apps carry code risk.
On this page10 sections
Bitcoin vs Ethereum, for someone about to buy cryptocurrency for the first time: the difference between Bitcoin and Ethereum is that Bitcoin is a network for sending payments, while Ethereum runs programs called smart contracts, and its coin pays for them. The two use different addresses and networks, so check both before you withdraw anything.
BTC vs ETH at a glance
| Bitcoin (BTC) | Ethereum (ETH) | |
|---|---|---|
| Built for | Sending payments | Running programs and tokens |
| Supply rule | 21 million cap | No fixed cap |
| New coins | Created at a rate that halves over time | Issued to validators, part of each fee burned |
| Confirming transactions | Proof of work (mining) | Proof of stake, since September 2022 |
| Fee paid in | BTC | ETH |
| Smallest unit | Satoshi, 100,000,000 in 1 bitcoin | Wei |
| Block time | About 10 minutes on average | 12 seconds when every slot has a block |
| Address starts with | 1, 3 or bc1 | 0x |
The sections below explain most rows, then what changes in the withdrawal screen.
What each network is for
ethereum.org puts it (opens in a new tab) this way: Bitcoin is a tool for sending value, and Ethereum is a platform for building it.
Ethereum is a blockchain network where developers build software, and its native coin is ether (ETH). The programs that run on it are called smart contracts. They let anyone create tokens (digital assets) and decentralized apps (dapps) that keep running around the clock.
For what owning a coin means, read what is cryptocurrency.
How new bitcoin and ether are created
Only 21 million bitcoins will ever be created (opens in a new tab). The number of new bitcoins created each year is automatically halved over time. This is called the halving.
ETH works differently. It has no fixed cap (opens in a new tab). New ETH is issued to reward network validators at a limited rate calculated by the protocol, and a portion of every transaction fee is permanently burned, meaning deleted from existence.
These rules say how coins are made, not what a coin is worth.
The two networks also confirm transactions differently. New Bitcoin transactions must be included in a block along with a mathematical proof of work, which is why Bitcoin is tied to mining. Ethereum originally used proof of work too, but switched to proof of stake in September 2022 (opens in a new tab).
Fees: which coin pays and what sets the amount
Sending on either network normally costs a network fee, and the fee coin is different.
On Bitcoin you pay in BTC: a fee is a small amount of bitcoin (opens in a new tab) paid by the sender to miners. The fee is relative to the number of bytes (opens in a new tab) in the transaction, and it is unrelated to the amount you send, so a bigger transfer is not automatically a bigger fee.
On Ethereum you pay a gas fee, and gas fees have to be paid in ETH (opens in a new tab). Gas prices are often quoted in gwei, and each gwei is one-billionth of an ETH. A token send is an Ethereum transaction too, so if the send screen asks for a fee in ETH and your wallet holds none, add some ETH first.
On an exchange's withdrawal screen, check whether the fee shown includes the network fee. For the details, read Bitcoin withdrawal fees and Ethereum gas fees.
What changes when you withdraw
Withdrawing means sending coins from an exchange to an address you control. Before you do, look at the first characters of the receiving address.
- A Bitcoin address starts with 1, 3 or bc1 (opens in a new tab).
- An Ethereum address starts with 0x followed by 40 letters and numbers, 42 characters in all.
Bitcoin and Ethereum are separate blockchains, and separate blockchains cannot natively communicate (opens in a new tab). Ask your wallet for the address of the coin you are sending, not any address it shows.
Ethereum has a second wrinkle: the same address can exist on several networks. MetaMask explains (opens in a new tab) that your address on both Ethereum Mainnet and BNB Smart Chain is exactly the same. So the address alone does not tell you which network your withdrawal will use. A network that is EVM-compatible (built to run Ethereum's software) does not always use a 0x address either. For how the same address works on layer 2 networks, read Ethereum mainnet vs layer 2.
Wrapped bitcoin (WBTC) is a token on the Ethereum network, an Ethereum version of Bitcoin. It is not BTC on the Bitcoin network.
To set up a wallet and protect it, read how to store crypto safely.
Staking and mining: how each network is secured
Ethereum's proof of stake works through staking: validators stake capital in the form of ETH (opens in a new tab) into a smart contract on Ethereum. Bitcoin is secured by mining instead.
Platforms that offer ETH staking set their own terms and waiting times. Read them before you stake, and see how to buy Ethereum.
Common misconceptions
- "Ethereum is Bitcoin with another name." If you are asking whether Ethereum is the same as Bitcoin, no: they are separate networks with their own coins, addresses and fee coins.
- "I have to buy a whole coin." Bitcoins can be divided (opens in a new tab) up to 8 decimal places, with 100,000,000 satoshis in 1 bitcoin. For ETH, look for an amount field on the order screen.
- "A company runs each network." bitcoin.org says (opens in a new tab) nobody owns the Bitcoin network, much like no one owns the technology behind email, and ethereum.org says (opens in a new tab) that today no single person or company runs Ethereum, with no CEO, board or central authority.
Risks to understand
- Price swings: either coin can fall in value as well as rise, and its supply rule does not change that.
- Ethereum apps run on smart contract code, and smart contract risk (opens in a new tab) is the risk of a bug in the code that can cause user funds to be lost.
- Scams target new buyers of both coins. Read how to spot crypto scams.
For the general buying steps, read how to buy crypto, then the guide for your coin before you buy: how to buy Bitcoin or how to buy Ethereum.
Frequently asked questions
Is ether the same thing as Ethereum?
No. Ethereum is the blockchain network and software platform. Ether (ETH) is its native coin, the one that powers the network and pays its fees. On an order screen, look for the ticker, ETH, to be sure you are buying the coin.
Can I hold both on one exchange account?
Check the exchange's list of supported coins in its app or help pages. If both Bitcoin and Ethereum are listed, you buy each one separately, and each balance is its own coin. When you withdraw, you enter a Bitcoin address for BTC and an Ethereum address for ETH, and you also choose the network your receiving wallet uses, because the same 0x address can exist on several networks. Follow the checklist in the section on what changes when you withdraw before you send.
Can I send bitcoin to an Ethereum address?
No. Bitcoin and Ethereum are separate blockchains, and ethereum.org says separate blockchains cannot natively communicate and tokens cannot move freely between them. A Bitcoin address starts with 1, 3 or bc1 and an Ethereum address with 0x, so if the withdrawal screen rejects an address or you have to choose a different coin, stop and get the right address from a wallet that lists the coin you are sending.
Sources
- Frequently Asked Questions, bitcoin.org (Bitcoin Project). Accessed .
- What is Ethereum?, ethereum.org. Accessed .
- What is ether (ETH)?, ethereum.org. Accessed .
- Blocks, ethereum.org. Accessed .
- Intro to ether, ethereum.org. Accessed .
- Gas and fees, ethereum.org. Accessed .
- Proof-of-stake (PoS), ethereum.org. Accessed .
- The Ethereum address format and why it matters when using MetaMask, MetaMask (Consensys). Accessed .
- Invoice address, Bitcoin Wiki (en.bitcoin.it). Accessed .
- Blockchain bridges, ethereum.org. Accessed .
- Vocabulary, bitcoin.org (Bitcoin Project). Accessed .
- BIP 13: Address Format for pay-to-script-hash, Bitcoin Improvement Proposals (github.com/bitcoin/bips). Accessed .
- BIP 173: Base32 address format for native v0-16 witness outputs, Bitcoin Improvement Proposals (github.com/bitcoin/bips). Accessed .
This guide was researched and written with AI using the sources above. It is general information, not financial advice. Cryptoassets are volatile and you could lose the money you invest. Check the rules in your country before you buy. Some links on this site may be affiliate links; they never change what we write. Spotted an error? Email contact@how2buycrypto.org.