What Is Ethereum? Why Are There So Many Damn Types Of "Bitcoins"

What Is Ethereum? Why Are There So Many Damn Types Of "Bitcoins"

Here are the questions everyone is asking: what is ethereum, how do I invest in it and why are there so many cryptocurrencies?

Unless you've been living under a rock, then you must have run across the buzzword "cryptocurrency".

The most commonly talked about is Bitcoin, one of many cryptocurrencies floating about in the digital world.

But the second most popular cryptocurrency, Ether or Ethereum, is starting to gain traction and popularity among novice investors too.

So what is Ethereum currency or Ether (ETH)?

what is ethereum currency

Firstly, Ethereum is the platform on which Ether is traded. So is Ether another Bitcoin?

Bitcoin is a peer-to-peer electronic cash system that enables online Bitcoin payments and its blockchain used to track ownership of Bitcoins.

Ethereum, another more sophisticated type of blockchain, on the other hand, focuses on running the programming code of any decentralised application.

For example, it can allow developers to build smart contracts. In fact, it can allow developers to build all kinds of apps.

Confused about what is a blockchain?

what is ethereum currency

Sally Davies said it best when she likened it to an existing example. “[Blockchain] is to Bitcoin, what the internet is to email. A big electronic system, on top of which you can build applications. Currency is just one,” tweeted the FT Technology Reporter.

So on blockchain, people can build currencies, smart contracts and other types of applications. Meanwhile on the Internet, people have built emails, web browsers, desktop apps, web games and more. The list is endless.

One spin-off from the Ethereum platform is Cryptokitties, for example.

Why are there so many types of “bitcoins” or digital currencies then?

what is ethereum currency

CoinMarketCap lists 1,037 different types of cryptocurrencies, 626 of which have listed market caps of at least $100,000.

Why are there so many types of cryptocurrencies in the market? There could be a few plausible reasons, which include:

1. The potential to get rich

If you were mining Bitcoin from home when Bitcoin FIRST came about, today you would be an instant millionaire. It is possible that these new cryptocurrencies that are popping up are hoping to have the same outcome in the future as one of its few primary adopters.

2. Experimentation

Programmers are like scientists. They like to experiment with the endless possibilities that the Internet offers. This could be one way they are doing so.

3. Advancement

Bitcoin’s existing blockchain is limited. Ethereum, on the other hand, allows more capabilities. It is never enough for mankind to remain stagnant. It is only natural that we seek to advance and improve what already exists and creating new technologies which include new cryptocurrencies is part of that.

We hope you've learned what is ethereum from this article! Want to jump on the cryptocurrency bandwagon? Familiarise yourself with it first by reading these articles:

Cryptocurrency: Why Is Everyone Talking About It And How Can It Make You Rich?

Future Of Cryptocurrency: Is Bitcoin A Fad Or Is It The Future Of Money?

Bitcoin Horror Story: How I Lost S$2 Million Overnight

Written by

Sarah Voon