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What Is Ether (ETH) and What Can I Do With It on the Ethereum Blockchain?

Estimated reading: 4 mins

What Is Ether (ETH) and What Can I Do With It?

With the whole world being digitised these days, it would come as no surprise that we'll have a well-constructed digital identity securely storing our personal data in a few years or so, and including a digital personality (metaverse) and digital assets (NFTs - non-fungible tokens and cryptocurrencies). It’s about time that we started making the shift to adapt to the changes of the future. However, to journey on that path, we'll need to understand how the digital world works. Although we may not explain the nitty-gritty of other technologies, we can tell you all about cryptocurrencies, cryptocurrency trading and blockchain technology. More specifically, today we'll learn about Ether (ETH) - one of the most commonly known and well-established forms of a digital asset. So let’s dive into this article to learn more about Ether and what we can do with it.

 

A Glance At Ether

Ether is a part of the Ethereum blockchain, created by Vitalik Buterin, Gavin Wood and others.

"On Ethereum, you can write code that controls money and build applications accessible anywhere in the world".

On this decentralised blockchain, you can create NFTs, software, ledgers, and whatnot at a fee - that fee being ETH, the currency the network functions on. However, aside from being a means of fee payment, Ether is also a standalone currency, and quite frankly, due to its popularity, it’s the elixir that keeps Ethereum going. The Ethereum algorithm is constantly under development to improve, and at present, upgrades known as Ethereum 2.0 are bound to show sometime soon.

 

What Is Ether (ETH)?

Simply put, Ether is a currency operating digitally. Ether tokens - much like any other cryptocurrency - are secured by cryptography. However, that’s just its crux; Ether is so much more than that. It operates on a decentralised system with an open-source, smart contract functionality (learn more about smart contracts here). Perhaps the way the Ethereum network is constructed is why the native token is the second most popular cryptocurrency globally. In terms of market capitalisation, it comes second only to Bitcoin. And, much of its success can be attributed to the Ether community, filled with people of diverse expertise, such as developers, ethical hackers, researchers, bounty hunters, etc. and the Ethereum Foundation.

What Is Ether (ETH) and What Can I Do With It
IMAGE SOURCE: Coinbase

 

How is Ether Different From Other Cryptocurrencies?

Understanding cryptocurrencies is an art and a science. Since, at their core, most are developed and function in similar ways, it’s often hard to understand and navigate the differences between the many cryptocurrencies. However, each cryptocurrency has specific attributes that make it unique in its particular way. Here are a few of Ether’s:

 

Ether is Infinite

Think of using a mobile game: if you want particular gadgets, you buy in-app money to obtain them. You can also purchase the app money irrespective of using it on a gadget. Ether is similar to that; it is available in abundant quantities, which means that you can purchase ETH anytime you want.

 

Decentralised System

A decentralised system means no one at the top governs the application. It is for the users to use as they please. No third party or authority could take it back if you purchased ETH.

 

Part of a Bigger Ecosystem

As mentioned earlier, Ether is a part of the Ethereum network used for creating, developing, and sharing decentralised applications (dApps) and crypto assets. Since the names are so similar, it can get confusing to remember which is what, so here’s the gist: Ether is a cryptocurrency, and Ethereum is the blockchain network.

 

What Can You Do With Ether?

The following is just a highlight of some of the most common ways people use ETH and is far from an exhaustive list.

1. Send And Receive Money In Real-Time

Sending and receiving ETH is one of the first things you could do with Ethereum. You can also use this digital currency to pay for goods and services - many cryptocurrency wallets allow this function. The transfer happens quickly and usually takes around five minutes for the coin to show in your crypto wallet.

The downside here is that the Ethereum network has been a victim of its own success and suffers from scalability issues which resulted in high transaction fees for many tokens deployed on the network. But, never fear, this is where developers have been working hard and Ethereum 2.0 comes to the rescue to should solve this problem as well as improve other aspects of the Ethereum platform. We'll cover Ethereum 2.0 in another article!

2. Swap Ether With Any Other Cryptocurrency

Yes, it's possible to swap one digital asset for another. For example, If you have ETH and wish to exchange it for BTC, you can do so without hurdles. At BitPrime, you can swap your digital currencies anytime. A transaction fee does apply for exchanging tokens, as per any other crypto transaction.

3. Collect Interest On Your ETH

It’s possible to earn interest on ETH if you stake it. The market for this is so huge that many people are making a passive income by staking their ETH. The interest/reward rates vary depending on the option used - but regardless, the APYs tend to be considerably higher than what traditional banks are offering via savings accounts or term deposits! Learn more in our quick guide to staking crypto.

4. Access Stablecoins In The Ethereum Ecosystem

As Ethereum.org puts it, "Stablecoins are Ethereum tokens designed to stay at a fixed value, even when the price of ETH changes". Stablecoins are pegged to things such as fiat currencies (e.g. USDC to USD). And given their price stability, they’re rising to be a crypto superstar on their own.

stablecoin types
IMAGE SOURCE: Bitdeal

 

How to Obtain ETH?

You can easily purchase ETH through a cryptocurrency exchange or trading platform. BitPrime is one of New Zealand’s most trusted service providers for crypto. So, if you’re interested in buying ETH, then head here.

 

How does Ether maintain its value?

It's true that the cryptocurrency market is volatile, but Ether does its very best to maintain its intrinsic value. Here are some things that Ether offers to always rise on the ranks of currency valuation:

  1. It acts as collateral for DeFi (decentralized finance).
  2. ETH is accepted as payment by retailers.
  3. It's the most common crypto for purchasing NFTs, collectables, and in-game items.

 

To Sum It Up...

You can do many things with this token aside from buying and selling. And since the crypto market is continuously rising and technology is constantly advancing, there’s no saying what can be done using the Ethereum network in the coming future. We know that cryptocurrency has its future cut out for itself, and the sooner we adapt to this, the better for us!

 


About the author:

Juwaria Merchant

Disclaimer:

The above references an opinion and is for informational purposes only. Do not take this as personalised financial advice or investment advice. The views expressed by the author do not necessarily represent the opinion of BitPrime.

 

Last updated: 22/03/2022

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