What is Ethereum (ETH)?

Ethereum is an open-source, largest, and globally decentralized; executing program also referred to as smart contracts. Launched in July of 2015, Ethereum enables the deployment of decentralized apps (D-Apps), build and run without any fraud and downtimes. Ethereum is used for two basic purposes.

• Ethereum is traded as a digital currency and to exchange with other currencies just like Bitcoin BTC does.
• Used as a network of Ethereum itself to run the applications.

Ethereum has its own programming language which runs on blockchain and helps developers to build and run applications like d-apps. Ethereum applications are supported by a cryptographic token which is known as ether ETH. So, Ethereum’s token is called Ether ETH, which is the cryptocurrency of Ethereum and it is used to trade and exchange with other digital currencies just like BTC. Ethereum’s blockchain is used to track the Token ownerships.

Token vs Coin

Tokens and coins are both digital assets and are used as a transfer of value. Usually, people use coins and tokens interchangeably. Coins are created within a network such as Bitcoin (BTC), LTC, and ETH, etc. On the other hand, tokens are created within the application on the blockchain. They are called ERC-20 tokens on the Ethereum network.

Decentralized Applications

Decentralized applications are programs or digital applications that exist on the Ethereum blockchain and run on a peer-to-peer network of computers with trust fewer protocols, instead of the control of a single computer and authority. They use token as rewards to give computing power to its users. D-APPS are created and designed to avoid a single point of failure.

Block Differences

The block size of Bitcoin is currently 1MB while Ethereum has varying block-size and depends on the complexity of smart contracts. This limit is called Gas and it varies from block to block. The basic complexity of ETH transactions from one account to another is 21000 Gas. Moreover, Ethereum has a block-time of around 15 seconds while its 10 minutes in the case of BTC.

Smart Contracts and EVM

Smart contracts are high-level programming codes. These codes are converted into the bytecodes using Ethereum’s Virtual Machine (EVM) and then Ethereum blockchain executes them. These fully functional smart contracts are also called “Turing Complete”.

Tokens and Rewards

BTC token generation halves every 4th year while ETH token generation continues at a constant number each year. Ethereum pre-mined supply was 72 million and 60 million were sold in 2025, during the initial coin offering. Ethereum miners receive 2 ETH block reward at a fixed rate, reduced from 3 ETH after the Constantinople hardfork. Miners also receive other rewards like referencing to uncles and Gas from the smart contracts.

(PoW) Algorithm

Ethereum uses ‘Ethash’ as the proof-of-work (PoW) algorithm which was designed for the prevention of ASIC mining. Bitcoin uses SHA-256 as the proof-of-work (PoW) algorithm.

Due to the full utilization of the cryptographic feature, Ethereum platform provides all the features of an ordinary blockchain plus the following benefits.

• Decentralized apps (d-apps) are built with the help of Ethereum blockchain and Turing Completeness, which have Zero Downtime. Means its apps can never go down and switched off.
• The Ethereum platform is much protective against hacking attacks and fraudulent transactions.
• The Ethereum platform is immutable against the data changes. No third party is involved that’s why the Ethereum platform is much secure.
• Instead of long transaction-verifications, Ethereum’s blockchain insure the instantly fast transactions with more security features.
• Ether ETH is the cryptocurrency of its own platform Ethereum. Acting as a fuel, Ether enables actions of the decentralized apps which are built on the Ethereum blockchain.
• Ethereum platform has proven itself reliable and its adaptive blockchain is active for many years.

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