About Ethereum

What is Ethereum?

Ethereum is the world's second largest public blockchain. Ethereum allows the storage and transfer of data by the usage of smart contracts, which determine agreements according to predefined requirements and rules between two or more parties, without the need to involve third parties. If these smart contracts are extensive, they’re usually referred to as decentralized applications (dApps). This means that Ethereum is used for more than payments, to simplify it can be described as an open-source internet-based marketplace for financial services, dApps, etc.

What is ether?

Ether (ETH) is the second largest cryptocurrency after bitcoin. Just like bitcoin, ether is a decentralized currency that operates without any control from third parties. Alike bitcoin, all transactions are kept on a public ledger for everyone to have transparent access to the ledger. Ether was created to be used as a method of payment on the Ethereum blockchain so participants can pay for hosting, executing and using the applications running on the blockchain. Unlike bitcoin, the amount of ether varies and is not capped.

What’s the difference between ether and bitcoin?

Both are global, digital and decentralized currencies that use blockchain as an underlying technology, yet the purpose to why they were created vary. While the primary purpose of bitcoin was to introduce a new digital monetary system, the main purpose of ether is to facilitate and monetize the operations within the Ethereum network.

What decides the value of ether?

Just like other currencies, the price of ether is regulated by supply and demand. In other words, the price that users are willing to buy and sell for, determines its value. As DeFi applications and NFT creations (minting) become more popular, new actors see value in ether hence prices are surging significantly and despite lack of regulation, volatility is decreasing.