Ether (ETH) is the digital currency of the Ethereum network, the same way Bitcoin (BTC) is to the Bitcoin network. All transactions on the Ethereum network require computing power to complete. ETH is the primary fuel of the network as it powers all the activities on the platform.
In understanding what is ether currency you most probably want to know what makes it unique. The Ethereum blockchain network provides a platform for various entities to store data and build decentralised applications (Dapps). Ether acts as the intermediary between the platform and the developers. It facilitates the computation of all the Dapps on the Ethereum network.
How does Ether work?
The uniqueness of the currency provides the basis for how Ether works. While there might be other tokens on the Ethereum platform, there are functions only Ether can do. One of such functions is fuelling and securing the Ethereum platform. For every transaction in the Ethereum platform, you pay a fee in ETH. This fee acts as an incentive for miners to verify and confirm transitions. The miners are responsible for securing and running the platform, hence ETH powers the Ethereum network.
The amount of ETH you pay for transactions depends on the resources needed to complete it. For example, a complex smart contract transaction requires more tokens than any other simple transaction.
How is Ether similar to other cryptocurrencies?
Ether has various features that make it similar to other cryptocurrencies. Like the other cryptocurrencies, Ether differs from fiat currencies. As a centralised currency, it allows you full control over your funds. ETH is secured by proven cryptography that protects the ETH wallet, the token, and transactions.
Ether currency supports peer-to-peer transactions without needing any intermediary. Also, the token stands out due to its divisibility. You don’t necessarily have to buy a full ETH to start using the token. You can buy fractions of the token – from as little as 0.00000000000000001ETH. This smallest Ether subunit is called Wei.
How do you acquire Ether?
There are various ways to acquire Ether. The first option is through mining. Ethereum mining involves several computers solving computational arithmetic puzzles. These solutions work to verify transactions in the Ethereum network. For every successful puzzle solved, the node gets rewarded in Ether. The mining profitability depends on the demand for the Ethereum network. For example, the Defi coins boom in 2020 made Ethereum mining profitable than Bitcoin mining in that period.
As Ethereum mining becomes more profitable, several high powered-computers join the network increasing its difficulty. Mining thus becomes difficult for the common CPUs or GPUs. It means an easier way to acquire ETH is through buying.
There are various options for how to buy Ether. The first is through peer-to-peer transactions from other Ether holders. However, the most reliable way to buy ETH is from a crypto exchange. There are various crypto exchanges that allow you to buy ETH using the AUD or exchange it for other cryptocurrencies.
Once you have the ETH, you need to store it in an ether wallet. So what is an ether wallet? It is a secure platform that allows you to interact with your Ethereum account. It allows you access to your ETH balance, transact, and connect to other applications.
