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Ether (ETH)

How is ether (ETH) different from bitcoin (BTC)?

When launching the sale of Ethereum’s native cryptocurrency, ether (ETH), co-founder Vitalik Buterin stated, “Ether is a product, NOT a security or investment offering. Ether is for paying transaction fees or building or purchasing decentralized application services on the Ethereum platform…”

Ether (ETH), is the native cryptocurrency of the Ethereum blockchain and has many of the same features as bitcoin (public, peer-to-peer, decentralized, censorship resistant). One distinction, however, is the method in which miners are incentivized. Instead of the combination of the block reward and the transaction fees (in Bitcoin), Ethereum uses gas, which is a measure of computational power needed to complete a transaction. For larger transactions that take more power, an Ethereum user will have to pay more gas to miners and vice versa.

For block size, Ethereum blocks are capped by the amount of gas each of them can store up. Ethereum is limited by 6.7 million gas limits on each block. The miners can only add transactions whose gas requirements add up to something which is equal to or less than the gas limit of the block. A typical one-on-one transaction eats up 21,000 units of gas.

Currently, ether is the second largest cryptocurrency by market cap, second to Bitcoin. However, unlike bitcoin, which has a hard cap of 21 million bitcoins, ether does not have (yet) a hard cap limit.

Soon, the current Ethereum Mainnet will merge with the Beacon Chain proof-of-stake system. This will mark the end of proof-of-work for Ethereum, and the full transition to proof-of-stake, sets the stage for future scaling upgrades including sharding while the Merge will reduce Ethereum’s energy consumption by ~99.95% More: https://ethereum.org/en/upgrades/merge/

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