Ethereum is a global and decentralised platform for cryptocurrencies and new types of applications.
Although commonly associated with Bitcoin, blockchain technology has many other applications that go way beyond digital currencies. In fact, Bitcoin is just one of several hundred applications using blockchain technology today.
Until quite recently, building blockchain applications required high development and cryptography skills. Times have changed and previously unimaginable applications – from e-voting to digital real estate asset registration to trading – are now developed and implemented faster than ever before.
By providing developers with the tools to build decentralised applications, Ethereum makes this possible.
What is the difference between Bitcoin and Ethereum?
To identify the main features of Ethereum, let’s make the usual comparison with Bitcoin. Although there are some significant technical differences between the two, the most important distinction to note is that Bitcoin and Ethereum differ substantially in purpose and applicability.
Bitcoin only provides one particular application of blockchain technology, which is a peer-to-peer electronic payment system that allows you to make bitcoin transactions online.
So, while the Bitcoin blockchain is mainly used to track the ownership of digital currency, the Ethereum blockchain can execute the programming code of any decentralised application.
Ethereum, a token paradise
In the Ethereum blockchain, instead of mining bitcoins, validators work to earn Ether (ETH), a type of token that powers the network. In addition to being a native, exchangeable cryptocurrency, Ether is also used by application developers to pay for transaction fees and services on the Ethereum network.
Therefore, ETH can be defined as both coin and utility token, it is not, however, a security token, as assured by the SEC, the US Securities and Exchange Commission.
There is a second type of token that is used on Ethereum to pay the fees for the validators confirming the transactions: gas. Each execution of a smart contract, for example, requires a certain amount of gas to be sent with it to reward the validators who place it on the blockchain.
Ethereum is also used as a platform to launch other cryptocurrencies. Thanks to the ERC–20 token standard, defined by the Ethereum Foundation, other developers can issue their own versions of this token. This is the case with Young: our cryptocurrency, the YNG, is an ERC-20 token.