Aside from Bitcoin, Ethereum is one of the most popular cryptocurrencies.
The Ethereum blockchain is powered by its native ETH token which can be used to interact with decentralised applications, pay for gas fees and staking.
This page will take you through the ins and outs of Ethereum and its ETH token.
What is Ethereum?
Launched in 2015 Ethereum is a decentralised blockchain network that allows users to interact with and create decentralised applications. The blockchain switched to a proof of stake consensus in 2022 meaning that instead of relying on powerful computers to validate transactions, any Ethereum user with the right amount of ETH can stake their tokens on the network and contribute to the validation of transactions.
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The network itself was built with security, decentralisation, and scalability in mind. Ethereum is preferred by cryptocurrency developers and decentralised application creators over other alternative blockchains due to its stability and popularity.
Multiple networks have been built on top of Ethereum. These networks are known as layer 2 networks because they exist as another layer on top of the Ethereum network.
Users can connect to these layer 2 networks easily via decentralised crypto wallets. With so many layer 2's, decentralised applications, and cryptocurrencies tied to the Ethereum network, Ethereum has grown to become the crypto market's largest blockchain by userbase.
Differences between Ethereum (ETH) and Bitcoin (BTC)
Compared to Bitcoin, Ethereum has the ability to host decentralised applications and evolve over time with ease thanks to the Ethereum foundation. Bitcoin cannot host decentralised applications and cannot change its attributes so easily.
Ethereum transactions are much quicker than Bitocin’s. When the network is not busy, some Ethereum transactions can be completed within a few seconds. Bitcoin transactions tend to resolve within 1 hour but it’s not unusual for a transaction to finalise within 24 hours.
Another difference is that Bitcoin’s supply is capped at 21 million while Ethereum’s supply changes over time. Currently, there are around 120 million ETH tokens in circulation. Although, since Ethereum switched to proof of stake, the token has become deflationary meaning the amount of ETH tokens in circulation will eventually decrease.