These three terms are similar but different. Here’s the connection between a ticker symbol, a cryptocurrency, and a blockchain network.
Ether vs. Ethereum – When getting started in the world of cryptocurrencies, three basic terms are used to talk about a blockchain and its own currency. For the Ethereum blockchain, these terms are “Ethereum,” “ether,” and “ETH.” Even though they are related, there are some small differences between them. Knowing what a blockchain is will help you understand its context.
A blockchain is a decentralized network that is run by independent people and businesses all over the world. Each of these hosts a copy of the transaction history of the network. Most blockchains are based on “crypto wallets,” which are anonymous accounts that can hold a single cryptocurrency. The “native” cryptocurrency of the blockchain is used to pay network fees.
All other cryptocurrencies are programs that run on the blockchain and aren’t tracked in the same way as the native token. So, when talking about a blockchain, there are terms for the blockchain network, its currency, and the ticker symbol that crypto exchanges use to track the currency.
On Ethereum’s official website, the Ethereum Foundation says that Ethereum is a programmable blockchain that can be used to write small programs called “smart contracts.” Ether is Ethereum’s native currency. Its ticker symbol is “ETH,” and you need it to use smart contracts. Any cryptocurrency exchange can be used to buy ETH, which can then be moved to a personal Ethereum wallet.
Many people who buy ETH don’t know that it stands for “ether,” so they call it “Ethereum” instead. Blockchain developers who build on Ethereum more often use “ether,” but they also use “ETH” more than “ether.” Most of the time, all you need to know is “Ethereum” (the network) and “ETH” (the currency), and “Ethereum” can be used instead of “ether.”
Ethereum Hosts Smart Contracts, ETH Pays For Them
Ethereum’s smart contracts are what give it its true value. Cryptocurrencies and non-fungible tokens (sometimes known as “NFTs”) are examples of assets that can be created through smart contracts and the software that interacts with them. DAOs, the Web3 communities used for governance, as well as other useful uses and specialized areas, can be powered by smart contracts.
An adequate amount of ETH must be present in a cryptocurrency wallet to cover the network charge associated with updating the blockchain’s data to engage with these smart contracts. To encourage participation and network decentralization, a portion of this charge is distributed to the users that manage the network.
Since Ethereum’s smart contracts are to blame for the 15,000+ cryptocurrencies in existence, the NFT craze, the Decentralized Finance (DeFi) industry, the Play-to-Earn (P2E) gaming industry, the hundreds of millions of dollars lost in scams, hacks, and poorly tested code, every cryptocurrency with an Elon Musk theme, the decentralized (non-Meta) Metaverse, and the birth of Web 3.0, Ethereum is frequently the testing ground for new ideas in blockchain (the blockchain-powered internet). Read More; Terra Luna Crypto Crash: Why Is LUNA Price Falling?
Ethereum suffers from a design that is soon bottlenecked by network congestion because it was the first smart contract blockchain constructed in a very short period of time. This causes ETH fees to rise. For most operations, these costs can range from $4 to $50, but during periods of heavy activity, they can reach hundreds, rendering Ethereum useless for most users.
Although Ethereum is gradually improving, this process has taken years, and it will be some time before the transaction fees are affordable for usage in applications aimed at broad audiences. There are Ethereum scaling solutions like Polygon and other smart contract blockchains like Solana to meet the ongoing demand for affordable smart contracts. Read Also; Top 10 Free Crypto Trading Courses that Beginners can Apply For
The cryptocurrency used to pay for using Ethereum’s blockchain network for smart contracts is called ether, and it is traded on cryptocurrency exchanges under the ticker code ETH. Most people will say “Ethereum” while referring to ether verbally (for example, “I want to buy more Ethereum.”) and “ETH” when writing it down. While everyone else just calls it “Ethereum,” developers frequently refer to ether by its proper name.