As of July 2025, the crypto landscape has evolved dramatically, with over 15,000 digital assets now available in the market. Despite this proliferation, Bitcoin and Ethereum continue to dominate as the two most significant cryptocurrencies, collectively representing over 60% of the total market capitalisation. Both networks have undergone substantial technological improvements: Bitcoin has seen widespread adoption of Layer 2 solutions like the Lightning Network, which now processes over 5,000 BTC daily, while Ethereum has successfully implemented multiple post-Merge upgrades, including Proto-Danksharding (EIP-4844) and account abstraction features. These developments have fundamentally transformed their transaction capabilities, cost structures, and use cases, making the choice between them more nuanced than ever before.
Bitcoin or Ethereum: What’s the difference?
Bitcoin and Ethereum represent two fundamentally different approaches to blockchain technology, each having evolved significantly by 2025. Bitcoin continues to operate on its original Proof of Work consensus mechanism but has been revolutionised by Layer 2 scaling solutions. The Lightning Network now handles over $2 billion in total value locked (TVL) and processes millions of transactions daily with sub-second finality and fees under $0.01. Meanwhile, Ethereum completed its transition to Proof of Stake in September 2022 (“The Merge”) and has since implemented crucial upgrades, including EIP-4844 (Proto-Danksharding) in March 2024, which reduced Layer 2 transaction costs by up to 90%. Ethereum’s energy consumption has decreased by 99.95% compared to its Proof of Work era, while transaction throughput has increased dramatically through its mature Layer 2 ecosystem, including Arbitrum, Optimism, Polygon, and Base, which collectively process over 10 million transactions daily. These developments have created distinct use cases: Bitcoin has emerged as the premier digital store of value and medium of exchange through Lightning, while Ethereum serves as the foundation for decentralised finance (DeFi), non-fungible tokens (NFTs), and Web3 applications.
Other important differences between Bitcoin and Ethereum include functionality and supply:
Functionality: Bitcoin has evolved beyond its original vision as purely digital cash. While it remains the premier store of value and medium of exchange, the Lightning Network has enabled instant micropayments, streaming payments, and complex payment routing. Bitcoin also supports basic smart contracts through technologies like Taproot and RGB protocols. Ethereum, meanwhile, has matured into the world’s leading smart contract platform, hosting over $100 billion in total value locked across DeFi protocols, supporting millions of NFTs, and powering thousands of decentralised applications (dApps). Ethereum’s account abstraction features now enable gasless transactions, social recovery wallets, and programmable transaction batching.
Supply: Bitcoin maintains its fixed maximum supply of 21 million coins, with approximately 19.8 million already mined as of July 2025. The next halving occurred in April 2024, reducing block rewards to 3.125 BTC. Ethereum transitioned to a deflationary monetary policy post-Merge, with EIP-1559’s fee burning mechanism often destroying more ETH than is issued through staking rewards. As of July 2025, Ethereum’s total supply has decreased by approximately 2% from its pre-Merge peak, making it effectively deflationary during periods of high network activity.
Businesses interested in integrating Bitcoin and Ethereum can compare their transaction capabilities to determine the most suitable crypto for their business.
Comparing transaction capabilities
Transaction speed and efficiency
As of July 2025, transaction speed comparisons between Bitcoin and Ethereum have been revolutionised by Layer 2 scaling solutions. On their base layers, Bitcoin still processes transactions in approximately 10 minutes per block, while Ethereum maintains its ~12-second block time. However, Layer 2 solutions have transformed the landscape: Bitcoin’s Lightning Network enables instant transactions with sub-second finality, while Ethereum’s Layer 2 ecosystem (Arbitrum, Optimism, Polygon, Base) processes transactions in 1-2 seconds with finality times under 10 seconds. For everyday transactions, both networks now offer near-instant experiences through their respective Layer 2 solutions, making speed less of a differentiating factor and more about choosing the right scaling solution for specific use cases.
Transaction costs
Transaction costs have been dramatically transformed by Layer 2 scaling solutions as of July 2025. On Bitcoin’s base layer, transaction fees typically range from $1-5 during normal conditions but can spike to $20-50 during high congestion periods. However, Lightning Network transactions cost fractions of a cent (often under $0.01) and are settled instantly. Ethereum’s base layer fees have stabilised between $5-15 for simple transfers and $20-100 for complex smart contract interactions, thanks to EIP-1559’s fee predictability mechanism. The real game-changer has been Ethereum’s Layer 2 ecosystem: transactions on Arbitrum, Optimism, Polygon, and Base typically cost $0.01-0.50, representing a 90-99% reduction from mainnet fees. This dramatic cost reduction has made microtransactions viable on both networks and enabled new use cases like streaming payments, micropayments for content, and frequent DeFi interactions. For businesses, the choice now depends more on specific requirements rather than cost alone, as both networks offer affordable transaction options through their respective scaling solutions.
Scalability
Scalability has been revolutionised for both networks by July 2025 through mature Layer 2 ecosystems. Bitcoin’s base layer still processes approximately 7 transactions per second (TPS), but the Lightning Network now handles millions of transactions daily with theoretically unlimited throughput for routing payments. Ethereum’s base layer maintains around 15 TPS post-Merge, but its Layer 2 scaling solutions have achieved remarkable throughput: Arbitrum processes over 40,000 TPS, Optimism handles 30,000+ TPS, Polygon achieves 65,000+ TPS, and Base processes 25,000+ TPS. Combined, Ethereum’s Layer 2 ecosystem processes over 10 million transactions daily, representing a 1000x improvement in practical scalability. The implementation of EIP-4844 (Proto-Danksharding) in 2024 further reduced Layer 2 costs and increased its capacity. For businesses, both networks now offer enterprise-grade scalability: Bitcoin through Lightning for payments and micropayments, and Ethereum through its diverse Layer 2 ecosystem for complex applications, DeFi, and smart contracts.
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Conclusion: The Future of Bitcoin and Ethereum Transactions in 2025
As of July 2025, the choice between Bitcoin and Ethereum for transactions has evolved far beyond the traditional speed and cost considerations. Both networks have successfully addressed their scalability challenges through mature Layer 2 ecosystems, fundamentally changing the transaction landscape.
Bitcoin has solidified its position as the premier digital store of value and payment network. The Lightning Network’s widespread adoption, processing over 5,000 BTC daily with sub-cent fees, has made Bitcoin viable for everything from micropayments to large-scale remittances. Recent developments in Bitcoin Layer 2 solutions, including RGB protocols and Taproot-enabled smart contracts, have expanded its utility beyond simple payments while maintaining its core security and decentralisation principles.
Ethereum has matured into the world’s leading smart contract platform, with its post-Merge energy efficiency improvements and Layer 2 scaling solutions processing over 10 million transactions daily. The successful implementation of EIP-4844 and account abstraction features has made Ethereum more accessible and cost-effective, while maintaining its position as the foundation for DeFi, NFTs, and Web3 applications.
For businesses and individuals choosing between these networks in 2025, the decision should be based on specific use cases rather than technical limitations. Bitcoin excels for store of value, payments, and applications requiring maximum security and decentralisation. Ethereum is ideal for complex smart contracts, DeFi interactions, and applications requiring programmability and flexibility.
The regulatory landscape has also matured significantly, with both networks benefiting from clearer guidelines and institutional adoption. Bitcoin ETFs have brought traditional finance into the crypto space, while Ethereum’s diverse ecosystem continues to drive innovation in decentralised finance and Web3 applications.
Ultimately, both Bitcoin and Ethereum have evolved into complementary rather than competing systems, each serving distinct but sometimes overlapping use cases in the broader crypto ecosystem of 2025.
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