Ether vs. Ethereum

Ethereum is...

• A network built on blockchain technology
• It's focus is to have decentralized apps (DAPPS)
• Based on Smart Contracts: A self-executing contract where given an input, a certain is output is guaranteed. The contract itself is basically a script of code.
• Proof of Work system: Miners do computation by recording transactions on a block. When a block is complete, it gets added to the blockchain.
  • Ethereum 2.0 will be Proof of Stake

Ether is...

• A currency/fuel for Ethereum, akin to something like compute units on AWS
• You spend Ether on computation and space for DAPPS
• Infinite supply (until Ethereum 2.0)
• Miners get Ether as a reward for the computing work.
• You specify how much Ether you want to spend to run your DAPP
  • The more you spend, the faster it will run. Measured in Gigawei, which is \(\text{1 Ether}^{-9}\)
  • GAS is the pricing fee

Summary

As a developer or a company, you might want to run your application on Ethereum.

You would write up your smart contract and publish it to the network. You then spend Ether to run it - more efficient DAPPS are going to cost less, while inefficient DAPPS cost more.

You can buy Ether in the crypto market or just mine it yourself. Ether is currently only obtained through mining, which consists of millions of PCs globally doing heavy computational work usually with the help of beefy video cards.

What is all that computational work for? The computations are to record ordered transactions on blocks, kind of like a ledger, which is only done after executing the smart contracts themselves. Hence, what is really getting your smart contracts to operate are the miners, unbeknownst to you as you simply pay in Ether fees (GAS) to execute your smart contract.