I see on some crypto exchanges, they offer Bitcoin perpetual orders and futures orders. What are the differences when compared to each other and vs margin orders.

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Futures are derivative instruments used to lock in a price of a security at a predetermined future date and price. The price that you buy a future indicate the price of what Bitcoin would be say 3 months from today, also known as the expiry of the contract. However, if investors would like to trade on the current price, the only option available to them is to physically buy Bitcoins. But the biggest disadvantage with this method is that you need to put in higher capital as compared to buying a futures contract. Moreover, futures contracts have to be rolled over as they come close to expiry.

Perpetual contracts are future contracts that do not expire. The price of perpetual contracts closely mimics that of the average spot price of Bitcoin on different exchanges. The cash settlement of a futures contract is: spot price at expiry - futures price (as you can take the physical delivery of asset at expiry and sell in the open market). Thus if the perpetual contract trades at a premium to the spot price of Bitcoin, the longs of the contract will need to make funding payments to the shorts. This will make the contract less attractive to longs and more attractive to shorts thereby pushing the contract price back down to the level of the spot price. The opposite happens if the perpetual trades at a discount to the spot price. This is the reason perpetual contract closely mimics Bitcoin price (after adjusting for trading costs).

Perpetual contracts are very similar to margin orders as you need not post the entire buying amount. You need to keep certain amount as collateral. If you keep 20% of the buying amount as collateral than you have 5x leverage. The advantage over futures is that they track the spot price and they prevent the hassle of rollovers.

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