Crypto Consulting Group
The Crypto Think-Tank

Ether

  Image courtesy of  Shutterstock

Image courtesy of Shutterstock

Ether

If Ethereum is the vehicle, think of ether (ETH) as the fuel that makes its go.

The network uses ETH, a unique piece of code that can be used to pay for the computational power needed to run a decentralized application (DApp), smart contract or program.

For example, if you wanted to post, delete or modify information in a DApp, or convert some ETH to another cryptocurrency you would pay for that computing power in ETH to get the network to process the change. Each action costs an amount of gas that's based on the computational power required and how long it takes to run. A transaction costs 500 gas, for example, which is paid in ETH.

Eighteen million ether, at most, are mined per year. Five ether are created roughly every 12 seconds, whenever a miner discovers a block, or a bundle of transactions

ETH is a digital bearer asset, meaning it holds value. It's just one of over 700 currencies that are traded over digital currency exchanges. Each of which have different functions (however most are Bitcoin copies). Rather than operating as a digital currency like Bitcoin, ETH seeks to provide 'fuel' for the Ethereum Virtual Machine (EVM).