Ether Vs Ethereum

Anisa Batabyal
| 28 April, 2020 | 2 min

There are numerous terms and terminologies used in the world of digital currencies. This has caused many misunderstandings when people are trying to make sense of those terms that exist, especially those that sound similar. Among them, the term that is used, misplaced and misunderstood is ether and ethereum. People tend to use it interchangeably even though both are different. Read below to learn what each one of them is and their difference. 

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What is Ethereum?

Today’s world is driven by technology, and there is a lot of information stored on servers and clouds. These include personal and financial information that is vulnerable to hacking. To overcome this, various technologies like blockchain have been used to decentralize the storage of information. Ethereum is one such platform that is also geared towards decentralization by leveraging the blockchain. 

It is a platform that can be used from anywhere, which enables its users to write applications and code that can control the money. This platform leverages blockchain technology principles to build and deploy the applications in a decentralized manner. The Ethereum platform can also be used to create smart contracts. A smart contract is an agreement between the buyer and seller and is written in the code. These are self-executing, giving great freedom to its developers. The other advantage of using Ethereum is that it cannot be hacked or tampered. 

In order to store the data, instead of servers or cloud systems that are owned by internet providers, it uses nodes. These nodes are not run by big companies but by volunteers, and it is interconnected so people across the globe can use it. Since not a single person or company has control over the system, it is less prone to attacks and has better control of personal data. 

What Is Ether?

Like how fuel is needed for the vehicle to run, the operations that are run on the Ethereum’s blockchain also need fuel. This fuel is nothing but Ether, also known as ETH. The programs, apps, and services that run on the Ethereum network need computing power, and that is provided by Ether. It is a digital asset that acts as payment and does not need any approval or transaction processing. It is used to power DApps, transactions, and smart contracts on the blockchain and hence called as programmable money. 

To explain this further, consider the following example. There is an application on the Ethereum network that allows creation, editing, and deletion of notes. If you want to make additions to the notes, you will be needed to pay a fee to use the processing power of the network. This payment can be covered using the Ether token. The transaction fee that the network will charge depends on the computing power needed. 

Ether & Ethereum - Differences

So after reading about Ether and Ethereum, you would have realized that Ether vs Ethereum is this - Ether is the fuel while Ethereum is the vehicle. That also means that Ether can be regarded as a commodity that can be either brought or sold. Like all other fuels, the value of Ether fluctuates and is based on demand and supply. From a technical perspective, Ether is considered as a premium or an incentive for developers to keep the Ethereum network going. It also helps to keep the network efficient, up-to-date with the latest apps, and ensure safety. A point to note is that Ether is finite, and there is a regulation on the number of coins that can be generated. To summarize, here are the key differences:

  1. What it is: Ether is the unit of currency in Ethereum. It is the fuel that propels Ethereum which can be considered as the vehicle
  2. Applications: Ethereum has many applications, like creating smart contracts, generating tokens, etc. Ether has only one purpose - that is to empower blockchain operations
  3. Role in Blockchain Technology: Ether is the cryptocurrency that runs on the Ethereum network, and Ethereum is a software platform based on blockchain technology. 
  4. Transactions: Ether can be sold and bought while Ethereum cannot be transacted like that

Armed with the above-detailed explanation, there is no reason why you should still be confused between Ether and Ethereum!

Frequently Asked Questions (FAQ)

  1. Is ether the same as ethereum?

There are certain differences that are being pointed out above. Ether is the fuel, and Ethereum is the vehicle.

  1. What is ether?

Ether is a digital asset that acts as payment and does not need any approval or transaction processing.

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