What is Ethereum? – Web3 Jargon Busting
People often wonder what Ethereum is and how it works. Ethereum is the most promising technology for the future of business and internet startups. It was developed to become the new standard for blockchain, with a focus on supporting innovation in applications, smart contracts and decentralization. Ether, or ETH, is its native cryptocurrency.
What is Ethereum?: The Basics
Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third-party interference. Vitalik Buterin, Gavin Wood, Charles Hoskinson, Anthony Di Iorio, and Joseph Lubin co-founded it in 2013.
Smart contracts can be used to build everything from simple agreements to complex applications. The network is kept running by computers all over the world. Therefore, it is an open-source project, like Bitcoin, with contributions from many people outside the company.
The initial coin offering (ICO) was advertised to the general public. This simply means that there is no company or group of companies behind Ethereum.
Rather, it is an open-source project run by a decentralized group of people and companies around the world. As a result, it is the blockchain of choice for companies and developers who are using this blockchain to change the way many sectors work.
What is Ether (ETH)?
Ether, or ETH, is Ethereum’s native cryptocurrency. It is essentially a digital token used to pay the network participants. Think of it as the fuel of the network, as it facilitates transactions between different people within the network.
Ether is the world’s second-largest cryptocurrency, second only to Bitcoin. Unlike Bitcoin, however, there is no limit to the number of ETH that can be created. Therefore, the number of ETH in circulation changes according to demand. One of the most popular use-cases of both the blockchain and ETH is undoubtedly NFTs. Most NFTs are built on the Ethereum blockchain because the way it is built makes it easy to verify ownership.
When distinguishing Ethereum and Ether, it is important to note that the former is a blockchain technology platform, while the latter is a cryptocurrency. Ethereum supports a range of applications, including decentralised applications, NFTs and crypto. Conversely, Ether is a token, available on dedicated crypto exchanges.