What is Ethereum? How it differs from Bitcoin

One step beyond Bitcoin

Bitcoin's ledger mainly records one thing: who owns how much bitcoin. Ethereum's creators, a group of developers including Vitalik Buterin, launched it in 2015. They wanted the ledger to work like a worldwide computer that anyone can run programs on.

These programs are called smart contracts. They run automatically by pre-written rules, such as "when this condition is met, send this many tokens to that address".

What runs on Ethereum?

• Tokens: thousands, including stablecoins such as USDT.
• DeFi: apps for lending, borrowing and swapping tokens without a bank.
• NFTs: ownership records for digital images and items.

The code behind these apps is often new and complex. A bug or a hack can wipe out huge sums in moments, and nobody can reverse it.

Bitcoin versus Ethereum

In 2022 Ethereum dropped mining and switched to proof of stake, an upgrade known as "the Merge". It cut the network's electricity use dramatically.

The price of ether

Ether's price is also set by supply and demand, and it usually swings even more than Bitcoin's. See today's price in taka on the Ethereum price page.

The risks

• Volatility: drops of 30–50% within weeks have happened.
• Smart-contract risk: DeFi apps are regularly hacked for hundreds of millions of dollars.
• Fake tokens and apps: impersonating real projects is extremely common.
• Legal risk: crypto transactions are not permitted in Bangladesh; see the legal status.

Key points

• Ethereum is a programmable blockchain; ether is its currency.
• Most stablecoins, DeFi and NFTs run on Ethereum.
• New technology means more risk: code bugs and fraud are both common.