Ether vs. Ethereum: The Main Difference Between Them

In the booming field of nascent technologies such as cryptocurrency, there are a lot of misconceptions surrounding the terminologies being used. L.M. Montgomery once said,

“It is dreadful what little things lead people to misunderstand each other.”

One such misunderstanding lies between Ether and Ethereum. So, in order to dispel the myths and misconceptions surrounding these two, we have written a detailed blog post that clarifies everything.

  

Ether vs. Ethereum

Ether is a token that acts as the power source for the blockchain platform Ethereum. People casually interchange terms like these without knowing that bother these terms mean something entirely different.

In simple words, Ethereum is the decentralized blockchain platform that allows developers to easily create smart contracts and build new decentralized applications using Ethereum’s self enforcing code. Ethereum was created by Vitalik Buterin with the purpose of creating a blockchain platform that goes beyond the financial usecases of the original cryptocurrency i.e. Bitcoin. Ethereum can be used for payment transactions, information verification and data storage. Ether or ETH, on the other hand, is the programmable coin used in the Ethereum platform. It acts as the fuel and currency for the Ethereum network.  

So, when people are talking about how they invested in Ethereum or what is the latest Ethereum rate, they actually mean Ethers (ETH).

How to learn this difference?

To learn this difference between Ether and Ethereum, we can use the simple example of our traditional financial institutions such as banks. Ethereum platform is the equivalent of a conventional banking system. It is the platform where transactions using Ether occur and it also acts as the final authority that can confirm the validity of those transactions. Like the banking system, there is no singular instance of Ethereum. When we talk about Ethereum, we are in reality referring to the Ethereum network created by the users’ computers, Ethereum virtual machine and Ethereum blockchain. 

Keeping the above example in view, Ether would be considered as the dollar. It is also a motivation for conducting transaction in the Ethereum platform. Just as loans with set interest rates are given by banks to businesses for carrying out customer transactions, cryptocurrency miners are rewarded with transaction fee, in the form of Ethers, for every transaction that is carried out using their mined blocks.

Conclusion:

Ethereum is the blockchain platform not a coin while Ether (ETH) is the currency or tradable unit of this platform and is the second most powerful digital currency after Bitcoin which can be observed from the data provided by any authentic cryptocurrency price tracker.

By understanding the difference between these Ether and Ethereum, we can also easily understand complex concepts like decentralized applications (DAPPs) and Initial Coin Offerings (ICOs). Clearing these misconceptions can also help you in understanding new blockchain technology and latest cryptocurrency news.