ETH is widely used in crypto markets for purchasing tokens, paying gas fees, and investing in crypto assets. But what is ETH, and is it the same as Ethereum? How does it differ from Bitcoin? Keep reading to learn more about this popular cryptocurrency!
What Is ETH?
Ether a.k.a. ETH is the native cryptocurrency of Ethereum. It is the second-largest cryptocurrency by market value today and is generated as staking rewards for miners in a proof-of-work system for contributing blocks to a blockchain.
The smallest subunit of ETH is a Wei, named after computer engineer and crypto pioneer Wei Dai. Presently there is no hard cap on ETH’s total supply on the crypto market.
What Is Ethereum?
Ethereum is a decentralized, open-source blockchain platform, originally conceptualized by Vitalik Buterin in 2013. In the platform’s white paper, Buterin described it as a project for building decentralized applications and attaching real-life assets to the blockchain. Other founders of Ethereum include Amir Chetrit (who stepped away early on), Anthony Di Iorio, and Gavin Wood.
Ethereum’s development work started in 2014 thanks to crowdfunding, and it went live on July 30, 2015. The project was developed by the Ethereum Foundation, EthereumJS, Nethermind, Hyperledger, and OpenEthereum.
Additional funding was raised in 2016 through a decentralized autonomous organization called The DAO. Through smart contracts developed on Ethereum, they were able to raise $150 million.
What Do Users Do On Ethereum?
Ethereum is known for allowing users to launch decentralized applications on it. Because many decentralized finance applications are built on Ethereum, the platform has enabled users to get financial services such as borrowing without help from traditional financial intermediaries.
Ethereum also allows the exchange and creation of non-fungible tokens (NFTs), which are treated as unique digital property. NFTs are often used to represent things such as artwork, in-game items, and collectibles.
Other cryptocurrencies have relied on Ethereum for their initial coin offers and work as ERC-20 tokens in Ethereum’s blockchain. Fees for sending ERC-20 tokens are paid with ETH, making Ethereum an important part of the crypto market.
The Ethereum 2.0 Shift
Development is currently underway to upgrade Ethereum. Known as Ethereum 2.0 or Eth2, the upgrade aims to increase the network’s transaction output. Its developers plan to do this by splitting the block’s verification workload into multiple blockchains running parallel to each other. This protocol is known as “sharding”
These parallel blockchains will go through a common consensus, proof-of-stake blockchain. This blockchain upgrade aims to protect Ethereum transactions, as attacking any single parallel blockchain would require tampering with the entire common consensus blockchain.
Phase 0 was launched in December 2020, establishing the proof-of-stake blockchain Beacon Chain. Phase 1 is ongoing and aims to merge Beacon Chain with Ethereum. Phase 2, a.k.a. “Shard Chains”, is set to make the current Ethereum network a shard on Ethereum 2.0 and is estimated to be released in 2023.
Are Ethereum And Bitcoin The Same?
No. Bitcoin and Ether (ETH) are both cryptocurrencies, and both of them operate on blockchain technology. They are both digital currencies free of the traditional regulations of institutions like banks. But, unlike Bitcoin, Ethereum provides a platform for smart contracts, NFTs, and decentralized finance.
Bitcoin is currently the leading coin in the crypto market, but with Ethereum’s potential for innovation and project development, it may soon overtake Bitcoin.
ETH is a valuable cryptocurrency because it can be used to buy and sell on the Ethereum network. Ethereum allows developers to release new cryptocurrencies, issue NFTs, and deploy smart contracts. All of these factors have made ETH a popular investment with crypto enthusiasts who see it as the future of blockchain tech.
ETH is expensive, with the current price of one ETH at nearly $4,000. But with new developments in the works, its price may soon skyrocket and make it a profitable investment. Check out online forums to see if investors think ETH is worth buying at its current price!