As is the case with many of the leading pioneers in the ever-expanding frontier of cutting edge technology, there seems to be a number of common misconceptions about cryptocurrencies, especially when it comes to Ether and bitcoin. 

For starters, bitcoin was designed to be used as an alternative form of payment for fiat money. Bitcoin was created in the hope that it might one day replace or at the very least be a viable alternative to legal tender. Whether that will actually happen remains to be seen, but what is clear is that bitcoin is meant to be a virtual all-purpose currency.

Ether, on the other hand, could best be described as the internal combustion engine of Ethereum. Ether fuels Ethereum, which among other things has provided a platform for the enforcement of the groundbreaking and ingenious smart contracts that are rapidly becoming a force to be reckoned with in the legal and financial sectors. Ethereum has also enabled developers to build and run distributed applications, also known as ĐApps. These ĐApps have opened up endless possibilities for business models that were previously infeasible or too expensive to run.

Technically speaking, Ether is not currently considered an alternative form of payment since there are no Ether machines to facilitate transactions in brick and mortar stores, or any Ether online payment processors. However, in time this could change. But in terms of differentiating between the two as cryptocurrencies, think of it this way: bitcoin is only a currency within the blockchain network while Ether is a currency that’s mainly focused within the Ethereum system (at this moment). So, while it is true that bitcoin and Ether could possibly both be labeled as parallel currencies after a fashion, they currently serve different purposes.

Josh Borenstein

Josh Borenstein is a staff writer for ETHNews Read More
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