When most people think of digital currency or cryptocurrency, they think of Bitcoin. Bitcoin is only one of many cryptocurrencies and cryptoassets available today, however. Among all of the new members of the cryptoasset scene (also called altcoins), none has made a bigger impact (both in terms of mindshare and in terms of market cap) than Ethereum.
Many people Ethereum akin to silver if Bitcoin is considered gold. However, many others in the crypto industry believe that Ethereum has the potential to overtake Bitcoin due to its inherent characteristics and capabilities that Bitcoin does not possess.
What is Ethereum?
Ethereum is a distinct blockchain platform different from Bitcoin - it was created by Vitalik Buterin and went live in the Summer of 2015 (read the constantly updated Ethereum white paper here).
Ethereum was designed as the ultimate blockchain upon which all kinds of blockchain-based applications including newer cryptocurrencies can be built. The Ethereum blockchain was designed with the target of fixing many of Bitcoin's problems/weaknesses as well as to enhance the efficiency of any application that is built on the Ethereum blockchain.
Ethereum has been one of the major reasons for the explosion in the number of initial coin offerings (ICOs) that are constantly happening all over the world due to the relative ease and reduced costs it now takes for a startup to release its own blockchain application or cryptocurrency. Effectively, many of the world's ICOs are build upon Ethereum.
Similar to Bitcoin, Ethereum uses a Proof of work (PoW) approach whereby computers solve complex mathematical problems in an attempt to receive a reward; this is also how transactions are validated around the world in a decentralized way. Ethereum used a slightly different hashing algorithm than Bitcoin and there are plans and discussions to transition Ethereum away from a Proof of work (PoW) approach to a Proof of Stake (PoS) approach - a Proof of Stake (PoS) approach is considered more sustainable and will likely require less intensive computing power.
Being a distinct blockchain platform, the creators of Ethereum recognized the importance of the platform having its own native currency with which transactions can be conducted on the Ethereum platform. This why the Ether token was created, which is the means of exchange on the Ethereum platform - users can use Ether (ETH) pay for the space to build their own applications as well as use ETH to make peer-to-peer payments in a decentralized way similar to Bitcoin.
But, Ethereum is more than just a means of exchange
Ethereum is touted as the biggest thing to happen in the crypto and blockchain scene since the creation of Bitcoin in 2009. This is because it brought about a number of new innovative features that have the potential to prove very useful. The main differentiating feature of Ethereum is the ability to engage in what are called "smart contracts" on the Ethereum platform - whereby Bitcoin is simply a means of exchange, Ethereum has the potential to be a lot more through the use of smart contracts.
A smart contract is a simple idea which made cryptocurrency payments safer for users all over the industry. It is a few lines of code (instructions) which dictate that a certain number of ETH should be transferred from one user of the Ethereum platform to another user upon the fulfillment of certain stated conditions and not otherwise. Smart contracts were designed to enable honest business between total strangers, in which the seller knows that as long as they deliver their part of the bargain, they will receive a full payment (or whatever else was bargained for). Additionally, buyers know that their payments remain safe until they receive the good or service they are paying for.
How to store your Ether
Ether and Bitcoin are completely separate things in the crypto space - they are built on different source codes and utilize different hashing algorithms. ETH and BTC cannot be stored on the same crypto wallet - a separate Ethereum wallet is required for the storage of ETH. In order to effectively and securely store your Ether, you'll need to find a reputable wallet that caters to ETH storage.
And now, given the rise of cyrptocurrencies and crypto assets to quasi-mainstream financial assets, we're dedicated to providing quality, relevant, and interesting material on cryptocurrencies and cryptoassets. Articles on Bitcoin, Ethereum, Ripple, Cardano, and many more cryptocurrencies and cryptoassets can be found on Pennies and Pounds - all that in addition to a plethora of information on what cryptoassets are, how the entire crypto industry came to be, blockchain/immutable ledger technology, mining, proof of work, proof of stake, and how to prudently invest in crypto if you are so inclined (based on your risk tolerance and ability to withstand the volatility that will come with a crypto portfolio).