Ether (ETH) and Ethereum are two well-known names in the world of cryptocurrencies, and have been at the center of attention due to their importance and prominent role in the crypto and blockchain markets. Vitalik Buterin introduced Ethereum in 2014 as the second-largest cryptocurrency in the world and one of the largest blockchains.
From the beginning of its operation, Ethereum attracted users and attracted many investors. However, despite this widespread acceptance, there is a big question that many users have encountered:
Is Ether the same as Ethereum? And what is the difference between Ether (ETH) and Ethereum? In this article, we intend to compare these two important names and address any potential ambiguities.
What is Ether?
All blockchain networks have their native digital currency, and in the case of the Ethereum blockchain, this digital currency is called Ether (ETH). For every transaction on the Ethereum network, a certain amount of Ether is required as a payment unit (transaction fee). This fee serves as an incentive for network participants to process transactions and execute smart contracts.
Ether can be considered a digital asset similar to cash, with significant similarities to securities. Its primary purpose is to simplify the payment process within the Ethereum network. In other words, to engage in transactions within Ethereum, you need Ether. If Ethereum is likened to a country, Ether would be the common currency in that country.
Ether serves as a currency for use within the Ethereum blockchain to pay for expenses, conduct transactions, and execute smart contracts. Due to Ether’s use as fuel (gas) for operations on the Ethereum network, it is colloquially referred to as “Ether coin.” However, its official term is “Ether.”
Computational power in Ethereum is paid for using Ether. In essence, Ether cannot be viewed as a typical digital currency; rather, it can be introduced as fuel necessary for launching and running the Ethereum network. Users need Ether for transactions, trading, and any other operations within Ethereum. Without Ether, processing smart contracts (DApps) and any other transactions in the Ethereum network would be practically impossible.
If there is a need to make changes to existing programs or smart contracts in the network, individuals must first pay a certain amount of Ether as a transaction fee. This act serves as a commitment signal to the network and is a crucial means to maintain the security and efficiency of the Ethereum network.
What is Ethereum?
The birth of the decentralized Ethereum network dates back to 2013 and it was the most prominent creation of Vitalik Buterin, the founder of this network. Ethereum was created to address challenges in the world of digital currencies and blockchain.
Ethereum, as the first blockchain network to enable the definition of smart contracts and host thousands of decentralized applications (DApps) in the digital currency world, is the second top cryptocurrency market after Bitcoin.While Bitcoin aims to create a decentralized payment system, Ethereum strives for decentralization in various aspects.
Ethereum is a decentralized network, meaning it is not governed by any authority, and no individual or intermediary controls it. This network is considered a type of free system. In this environment, there is a specific programming language called Solidity that developers use to develop smart contracts, and the payment system operates entirely privately and is based on Ether.
The Ethereum network is managed by thousands of computer systems worldwide, each of which voluntarily carries out network activities and receives Ether as rewards. The distributed nature of information in the Ethereum network significantly reduces the possibility of alteration and manipulation.
The decentralization feature of Ethereum has made it resilient against risks such as hacking and equipment failures. One notable feature of smart contracts is their ability to minimize fraud, censorship, equipment failures, and third-party interference. In Ethereum, changes to data or even their deletion are impossible unless all members agree to the changes.
Read More :What is Ethereum In Simple Terms
Difference Between Ether (ETH) and Ethereum
The fundamental differences between Ethereum and its digital currency, Ether (ETH), exist. Ethereum is a blockchain and distributed platform designed for various purposes, while Ether is the digital currency used within the Ethereum platform.
Ethereum is not only a digital currency but also a programmable software platform utilizing blockchain technology. However, Ether, as the transactional unit within the Ethereum network, is always necessary for trading and executing various operations on this platform.
Regarding the difference between Ether (ETH) and Ethereum, it should be noted that Ether is not just a cryptocurrency; it represents a larger ecosystem called Ethereum. Ether is a cryptocurrency that operates within the Ethereum network and is considered the second most popular cryptocurrency globally after Bitcoin.
Is Ether the Same as Ethereum
Ethereum operates as a blockchain programming platform without specific ownership. However, all programs and services connected to this network require computational power, which is not always available for free. Ether acts as a solution to pay for computational power costs.
Ether can be considered like cash in the sense that, for transactions, there is no need for third-party intermediaries for registration or processing. Nevertheless, Ether is not precisely a digital currency but can be regarded as fuel for running programs in the decentralized Ethereum network.
To better understand the concept, imagine you want to add a series of numbers together. To perform this task, your calculator requires computational power, usually provided by batteries. Now, suppose you can delegate these calculations to someone else, and instead of buying batteries for the calculator, you use Ether to compensate them for the computational power. This allows you to predict the amount of Ether needed based on the computational power required for a specific equation.
Where to Store Ether
You can store your Ethers in personal wallets and exchange wallets. Generally, it is advisable not to keep your cryptocurrencies in exchanges because, fundamentally, the exchange owns your assets and may restrict your access for any reason. If your Ether holdings are small or you plan to trade with them, you can store them in exchange wallets to avoid paying fees for each transfer.