Ethereum vs Ether vs ETH — What’s in a name?
`Ethereum`, `Ether`, ETH` — three different terms but what do they mean and when should you use them?
Let me first start by saying that I recognise that this is incredibly pedantic and in the grand scheme of things the majority of people know what’s meant when the terms are used interchangeably. However I often joke to newbies getting into the crypto space that I would be a millionaire if I had £1 every time these term were confused, and that’s because as many people within the crypto industry get this wrong as people outside the industry.
This short read is therefore to provide a precise overview of what these terms actually mean, in the hope that we can all go forward correctly speaking about these terms.
So whats’ the difference?
Ethereum — This is the name of the protocol/network/blockchain. It’s used when talking about the network of nodes which work together to validate transactions, achieve consensus and mine blocks. It was launched back in 2015 with the ambition of being a decentralised world computer and the most prominent figure is Vitalik Buterin, although as an open-source project it has many thousands of individuals collaborating on the software.
Ether — This is the native cryptocurrency of the Ethereum blockchain and incentivises miners and participants to act honestly on the system. It is used to transfer value between entities on the network and can also be used to pay for goods and services in ‘the real world’ or even digital cats online!
ETH — This is the ticker symbol which is used on many price charts and tables to refer to an Ether price pair e.g ETH/BTC, USD/ETH. This is akin to `DIS` which is the stock symbol for the Walt Disney Company, `AAPL` which is Apple Inc, `GBP` which is the Great British Pound or `XAU` which refers to the gold trading price. This can be pronounced either phonetically or as “Eee-th”.
Correct and Incorrect Uses
As is now hopefully clear from the above explanation, Ether is the native cryptocurrency of the Ethereum blockchain and can be traded on exchanges in pairs such as ETH/GBP.
It would therefore be incorrect to say that you are buying or selling Ethereum… this is the blockchain and it’s not for sale. It would also be incorrect to refer to the Ether protocol … Ether is the cryptocurrency, not the network.
To illustrate this, consider the 2016 craze PokemonGo. The app, PokemonGo, is the network and Pokécoins are the currency which you can use to buy new pokéballs and in game accessories. You can’t buy a new backpack for your avatar with PokemonGo … that makes no sense as PokemonGo is the game. Likewise you’re not a player in the Pokécoin community as that’s the currency not the community.
Why do people get confused?
Rather helpfully (or unhelpfully, depending on how you look at it) bitcoin is the name of both the cryptocurrency and the network. As such, it can be used with both contexts correctly (although a capital ‘B’ should be used when referring to the blockchain rather than the cryptocurrency). As with `ETH`, `BTC` is the ticker symbol for bitcoin and used to denote the trading pairs on exchanges and services etc.
I believe this is why many people believe they can interchangeable use the term ‘Ethereum’ to mean both the protocol and the cryptocurrency. However that is technically incorrect. Ethereum is the blockchain, Ether is the cryptocurrency.
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To read more about the native currencies of the various blockchains and their smallest denominations you can read: https://www.linkedin.com/pulse/cryptocurrency-base-units-tara-annison/?trk=related_artice_Cryptocurrency%20Base%20Units_article-card_title
[A shout out to IG who on my googling, were the only website I found who correctly used the term `Ether` to refer to the currency: https://www.ig.com/uk/cryptocurrency-data 👏👏]