Ethereum is the world’s second most valuable cryptocurrency with a market capitalization of $17.42 billion (at the time of writing this!). Its token price is currently at $164.65 and lately it has seen a lot of volatility.
What is Ethereum?
Ethereum is a blockchain system that consists of a network of thousands of volunteer computers across the world that have come together to create a decentralized and distributed mega computer.
EVM (Ethereum Virtual Machine) is the operating system on which this world computer runs. This operating system understands and executes the commands given in programming languages created for the network. The applications that the EVM executes are called Smart Contracts, which are just programs that control the transfer of the native cryptocurrency (called Ether) between accounts once certain pre-conditions are met.
What’s the Difference Between Bitcoin and Ethereum?
Bitcoin was the first ever cryptocurrency that was created by the mysterious Satoshi Nakamoto over a decade ago. It is a money-transfer system that has been built on a blockchain.
Ethereum, on the other hand, is an entire network. It has its own web browser, payment system and coding language. The most critical difference between the two are that users can create decentralized Apps (Dapps) on the Ethereum blockchain.
Dapps allow users to cut out middlemen, which means all the costs associated with 3rd parties are also cut out. In fact, Ethereum has been such a successful network that most of the other cryptocurrencies created have been built on its blockchain.
What is Ether?
Ethereum as a network is focused on acting like a decentralized internet and app store. For this system to work, a currency is needed to pay for the computations required. Ether is that currency. Well, the cryptocurrency.
However, Ether is not just a cryptocurrency. It also acts as fuel for the Dapps that operate within the network.
Interestingly, despite the fact that the network and the cryptocurrency that powers that network have two different names, most people refer to both with the same name now – Ethereum (ETH).