- 4 days ago
The Ethereum currency (Ether), is the second most widely adopted cryptocurrency after Bitcoin. Just like Bitcoin, it is represented by a computer code, functions as a form of payment, as a store of value and is distributed through blockchain technology. Unlike Bitcoin, however, Ethereum has more to it; it functions to create and operate all sorts of applications on the Ethereum blockchain.
To understand the world of Ethereum, let’s first understand the difference between Ethereum and the Ethereum currency (Ether).
Ethereum, founded by Vitalik Buterin, is a decentralized network where software developers can build their applications (DApps) on. The decentralized network is facilitated through blockchain technology, where the details of any exchange are verified and stored. Exchanges are created through smart contracts which are then stored on the Ethereum blockchain. A smart contract is an automated piece of code which outlines the agreement between a buyer and seller. On the Ethereum platform, smart contracts are created using a programming language called ‘Solidity.’ The key significance of the use of smart contracts is that they diminish the risks of fraud or the need for a third party in an exchange. Once a smart contract is added to the blockchain, it cannot be edited in any way. Smart contracts are distributed and executed through the Ethereum Virtual Machine (EVM). The EVM is a software that runs the smart contract protocol and ensures that all it’s data exists in every computer (node) in the network. EVM is known as the ‘world computer’ as it combines all the nodes in the network.
Whilst Ethereum refers to the actual network, Ether is the cryptocurrency that is used to fuel the network .Ether is the form of payment that enables users on the Ethereum platform to carry out operations on the network. In other words, the EVM charges a transaction fee, paid in Ether, anytime a smart contract is created to allow an exchange.
Like Bitcoin, Ether’s value also has a high volatility rate; in its early days 1 Ether was worth just under 67 cents and has had record highs as large as $4,362. In addition, like Bitcoin, Ether was also designed to be used within the Ethereum network, but has also been adopted as a form of payment by major companies such as Overstock and Cheapair. z
Notably however, whilst Bitcoin operates on predefined codes, Ethereum is an open-source blockchain; it can be run on any code chosen, when building an app on the network. Furthermore, whilst Bitcoin is capped at 21 million tokens, Ether is infinite.