Ethereum is a leading blockchain network that supports smart contracts and decentralized applications, but it faces challenges in fees and speed. Arbitrum is a layer 2 solution built on top of Ethereum to improve efficiency and reduce costs. As the use of blockchain expands in 2025, it is increasingly important to compare the two networks to understand the advantages of each and choose the most suitable one for developers and users.

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Comparison between Bitcoin and Ethereum: Which is better to invest in 2025?

 Ethereum

A blockchain network that supports smart contracts and decentralized applications (dApps).

It currently operates a Proof of Stake mechanism (ETH betting auditors to verify transactions).

Uses: DeFi, NFT, dApps.

Advantages: Flexibility, security, active community.

Disadvantages: High fees, slow expansion.

Arbitrum

Layer 2 solution built on Ethereum to improve speed and lower fees.

 

Uses Optimistic Rollups: Processes off-chain transactions and sends aggregated data for Ethereum.

 

Uses: dApps are faster and cheaper, DeFi.

Advantages: Low fees, high speed, Ethereum security.

Disadvantages: slow withdrawal of funds, technical complexity.

 

Comparison between Arbitrum and Ethereum

Ethereum is the primary blockchain platform that launched the concept of smart contracts and decentralized applications (DApps). It is characterized by being a decentralized and secure network, but it faces challenges in transaction speed and high gas costs as a result of high congestion on the network. Ethereum is developing solutions such as Ethereum 2.0 to improve performance and reduce fees by moving to a Proof of Stake system.

 

Arbitrum is a second-layer solution built on Ethereum that aims to improve transaction speed and significantly reduce gas costs through the use of "rollups" technology. Arbitrum allows faster and cheaper transactions to be executed while maintaining the security of the Ethereum network because it relies on it to verify transactions. With this, Arbitrum provides a more efficient experience for users and developers, especially in decentralized finance (DeFi) applications and games that require many and fast transactions.

When to choose Ethereum?

Ideal usage scenarios for Ethereum:

When you need the highest level of security and decentralization: Ethereum is the original network that uses the Proof of Stake (PoS) protocol after the last update, and has the largest number of nodes and community.

 

When developing DeFi or NFT applications with strict security requirements: Ethereum is considered the most reliable thanks to its long history and transparency.

 

When the priority is to support advanced development tools and libraries: Most smart contract development tools (such as Solidity, Hardhat, Truffle) are primarily intended for Ethereum.

 

When targeting a large audience on the core network: Because most wallets, applications, and financial platforms still primarily support Ethereum.

 

When to choose Arbitrum?

Optimal usage scenarios for Arbitrum:

When you need lower transaction fees and faster speed: Arbitrum is a Layer 2 solution that is used to improve Ethereum's performance and reduce transaction cost with clustering technology (rollups).

 

When you want to provide a seamless user experience without sacrificing security: Arbitrum inherits the security of Ethereum but offers higher speed and efficiency.

 

When you focus on applications that require many and frequent transactions such as games, high-frequency DeFi applications, and fast trading.

 

When you want to reduce barriers for new users in terms of high Ethereum gas costs.

 

The future of Arbitrum and Ethereum

Ethereum continues to evolve with updates like Sharding and Verkle Trees that will increase capacity and expansion in a decentralized manner.

 

Arbitrum is expected to expand further as a core Layer 2 solution, with improvements in execution speed and deep integration with Ethereum, as well as support for more complex applications.

 

There is a move towards cross-chain interoperability so that developers and users can move seamlessly between Ethereum and Layer 2s like Arbitrum.

 

The emergence of more similar solutions such as Optimism and others will enhance competition and innovation in the field of expansion.

 

The impact on adoption by users and developers

Users will benefit from lower costs and faster transactions in Layer 2s such as Arbitrum, which increases the hands-on experience and encourages the use of applications.

 

Developers will benefit from advanced development tools and extensive community support in Ethereum, with the ability to scale applications using Arbitrum.

 

Layer 2 adoption is expected to increase incrementally, with Ethereum remaining the core network for protection and decentralization, creating an integrated and resilient ecosystem.

 

What is the difference between Layer 1 and Layer 2?

Layer 1 is the underlying blockchain itself, like Ethereum, where all transactions are processed and confirmed directly on the main network.

 

Layer 2 is a solution built on top of Layer 1 to improve the speed and efficiency of transactions by executing them off the main chain and then recording the results on Layer 1. Such as Arbitrum, which reduces gas fees and increases transaction speed.

 

Can Arbitrum replace Ethereum?

No, Arbitrum is not a replacement for Ethereum, but rather an extension of it to improve performance and reduce costs. Arbitrum relies on and leverages Ethereum rather than replacing it.

 

Is Arbitrum as secure as Ethereum?

Arbitrum relies on Ethereum security because it records the results of operations on the Ethereum chain. Therefore, its security is tied to that of the Ethereum network itself, making it very secure but with improvements in speed and costs.