Direct answer
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The core difference is how each network moves a call. The public switched telephone network (PSTN) uses circuit switching, which reserves a dedicated path for the whole conversation, while Voice over Internet Protocol (VoIP) uses packet switching, breaking speech into data packets that share an IP network with your other traffic.[1][2][3] The PSTN runs over operator-owned copper and digital trunks and sets up calls with a separate signaling network called SS7, whereas VoIP runs over broadband and sets up calls with internet protocols such as SIP, carrying the audio in RTP packets.[1][5][6][7] Because VoIP treats voice as data, it usually costs less to run and can add features or capacity in software, though it now depends on your power and internet staying up.[2][9] The two are less rivals than successive generations: carriers are retiring the PSTN in favor of IP, and in the United Kingdom the switch off is scheduled for 31 January 2027.[2][10]