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A horizontal bread maker makes a loaf which looks more like a loaf baked by a master baker in a conventional baking tin placed in an oven because it makes a loaf with a top crust formed along the whole length of the loaf. In a vertical bread maker the bottom of the pan is at the heal of the bread and a top crust forms at the other end of the loaf.
All bread making machines must have a "paddle" to knead the dough. Because the bread bakes around the paddle it leaves a "paddle hole" in the bread. Some horizontal bread makers have two paddles - to help ensure that all the dough gets kneaded evenly throughout the loaf - and consequently loaves from such horizontal machines have two paddle holes.
Vertical bread makers only require one paddle so will only leave one paddle hole at one end of the loaf. One reason for that design is to help ensure that all the dough gets kneaded evenly throughout the loaf because the dough keeps "falling down" onto the paddle whilst it is kneading.
Tastewise, there is hardly any difference between the two types of bread maker so people choose a model mostly because of the overall size of the machine, the number of different programs it has and, of course, its price.
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