The world of the blockchain is, for simplicity, divided into two entities : the blockchain Bitcoin and the blockchain Ethereum. The subdivisions of each do not matter here. It is therefore just as important to know the characteristics of the Ethereum blockchain as those of the Bitcoin blockchain. Especially since the blockchain Ethereum has much more potential than the blockchain Bitcoin.
The visibility of the Ethereum blockchain is partly symbolized by its cryptocurrency: ether (ETC). This blockchain goes far beyond the world of cryptos but this article will be dedicated to the ether. In the preamble, the name is ether is very often confused with ethereum . This is quite normal and I find it quite illogical that the cryptocurrency does not have the name of the blockchain it comes from … Moreover, the name ether do not please me too much because it refers to the substance well known to the medical world. I will sometimes us the expression ” ether (ethereum )”. Let’s go through this nominal quarrel and go to the basics!
Origins of ether (ethereum)
The origins of ether are inseparable from that of Bitcoin, which is also the case of other crypto-currencies. For the global history of cryptos, I refer you to the article on bitcoin. More specifically, it is very difficult to dissociate ether from the Ethereum blockchain. As the official website of the blockchain writes, ether is the “crypto-fuel” ( crypto-fuel ). You will forgive me the rehearsals with the article devoted to the blockchain Ethereum.
In 2011, a young Russian emigrated to Canada, just 17 years old, discovered the world of blockchain and Bitcoin. Computer genius and caricature of the geek with excessive intelligence, Vitalik Buterin understands the potentialities of this technology. He decided to devote a good part of his time to it by founding the Bitcoin Magazine website in September of the same year.
Fascinated by Bitcoin, Buterin quickly sees the limits of his blockchain. Simply put, it can only be used to transfer money from one person to another. That’s when, at the age of 19, young Vitalik published his white paper in September 2013. It is entitled “A Next Generation of Smart Contracts and a Decentralized Application Platform” ( VO: A Next Generation of Smart Contracts & a Decentralized Application Platform ). The goal is to create a blockchain that can have an infinity of applications.
Birth of ether (ethereum)
However, Buterin does not have the funds to finance its project. In January 2014, he decided to realize one of the first ICO in history. It gives birth to the token (digital token) called ether, the cryptocurrency support of the future blockchain Ethereum. In just 12 hours, Buterin and his team raised 3,700 bitcoins, or about $ 2.3 million at the time! In other words, the bet was successful.
As will be seen in the feature section, ether and bitcoin have many things in common. But their birth is fundamentally different. While one is a pure creation of the mind (bitcoin), the other is the essential support for the operations performed on the blockchain Ethereum (ether). In other words, originally, the ether was only for funding Ethereum projects. Ether has become a cryptocurrency that can also be used on trading platforms, which has allowed its value to explode.
In July 2016, the blockchain Ethereum split in two following the scandal of The DAO. This hard fork (schism) gave birth to Ethereum Classic and its cryptocurrency, the ether classic (ECC). Because of its relative confidentiality, it will not be discussed further.
Characteristics of ether (ethereum)
The developers of the ether are clear: contrarily to the creation of Satoshi Nakamoto for which they have much admiration, it is not intended to be used as a currency. Ether would be a cryptocurrency complementary to bitcoin. Yet, the opposite is happening on the exchange platforms. The ether is then in spite of it mainly used to make speculation or an investment.
The original destination of the ether is to be a means of exchange for secure peer-to-peer contracts. It also facilitates and monetizes the operation of Ethereum to allow developers to build and run distributed applications.
In other words, the ether will be used to run a decentralized network, such as running a smart contract. This operation is materialized by transaction fees called gas. A real fuel in short! Each action amounts to a quantity of gas based on the required computing power and the operating time. Thus, as an economic system, ether rules are more open because, unlike bitcoin, the emission of ethers is not limited. This is the reason why the transactions in ether are much superior to those in bitcoin.
The differences between ether and bitcoin
The best way to understand how the ether works is to compare it with that of bitcoin.
In the Bitcoin blockchain, each block is created every 10 minutes, compared to just 15 seconds in the Ethereum blockchain. This results in a great fluidity of transactions. However, these data are not irreversible and could evolve in the coming months.
Ether miners are remunerated at a constant rate, while bitcoin mining pay goes down. Which, for the latter, is not a problem because this is provided by the protocol.
The gas, mentioned above, vary according to the complexity of the transaction. For bitcoin, it’s the size of the transaction in bytes that makes the difference. Hence the transaction fees much lower for transactions in ether.
Finally, the emission of ethers is not limited to a specific number, unlike the Bitcoin protocol.
For the rest, few differences since the mining of the ether uses the consensus proof-of-work. So I refer you again to the article on bitcoin. However, as you read this article, it is possible that the proof-of-stake consensus is in place. Much less energy hungry, his security is still fallible. The article will of course be updated as soon as the change is made.
It is therefore quite difficult to determine the characteristics of the only ether . Indeed, the cryptocurrency has been created to run applications using the Ethereum blockchain. However, ether is also used as cryptocurrency in the same way as the Bitcoin protocol.
What must we conclude? It’s hard to get a real idea, so things can move. The idea of letting sleep this article once written is not a great idea! The Ethereum blockchain can totally evolve, bringing with it its ether. Still, the emergence of positive applications running Ethereum can only be beneficial for the ether.