Unlike Bitcoin, the cryptocurrency Ether doesn’t rely on unspent transaction outputs (UTXOs). Ether, which is based on Ethereum’s blockchain, instead utilizes a state transition system of accounts and balances. State (denoting the current balance of all accounts) is storked in a Markle Patricia tree which is kept separated from Ethereum’s blockchain.
The Ethereum blockchain contains a growing list of blocks (records) which are linked and secured by cryptography. Ethereum is both public and open-source. In 2018, Ethereum’s pure Proof-of-Work scheme was replaced with a hybrid scheme that takes both Proof-of-Work and Proof-of-Stake into account.
The average block time for Ether is just 14 to 15 seconds, which is very quick compared to Bitcoin’s average blocktime of 10 minutes.
The Ether system has no upper limit for the creation of Ether coins. In June 2018, Ether coin number 100 million was created.
Symbol: Ξ (this is the uppercase version of the Greek Xi character)
Ledger: Open and distributed
Issuance: Block and uncle/ommer reward
Hash function: Keccak
Block reward: 3 ETH (non-deterministic)
Average block time: 14-15 seconds
Unit and subunits
The base unit is 1 Ether. The subunits are Gwei and Wei, both named in honor of the computer engineer Wei Dai.
1 Ether = 1 billion Gwei (1,000,000,000 Gwei)
1 Ether = 1,000,000,000,000,000,000 Wei
What is gas?
With the more famous cryptocurrency Bitcoin, the transaction fee is based only on the size of the transaction. Ether, on the other hand, employ a more complicated system known as gas, where several factors are taken into account to determine the size of the transaction fee.
When you transfer Ether, factors such as computational complexity, use of bandwith and storage space can impact the transaction cost.
Generally speaking, it is cheaper to transfer Ether than Bitcoin.
Compared to Bitcoin mining, Ether mining has a more consistent mining rate. For Bitcoin, the mining rate is halved every four years, but for Ether, it is almost consistent (althugh it may be impacted by hard forks).
As mentioned above, the cryptocurrency Ether uses Ethereum’s blockchain. Ethereum’s is a distributed computing platform and operating system with smart contract (scripting) functionality. Scripts are executed by the Ethereum Virtual Machine (EVM), a decentralized Turing-complete virtual machine using an internal network of public nodes.
Ethereum supports a modified version Nakamoto consensus via transaction-based state transitions.
The hard-fork of 2016
In June 2016, a hacker exploited a flaw in the DAO project’s contract software to steal one-third of the money kept in the DAO fund. At the time, the amount of stolen Ether was worth roughly 50 million in United States dollars.
The Ethereum Community reacted by hard-forking the Ethereum blockchain to return the stolen coins. As always, the decision to hard-fork was highly controversal.
The hard-fork took place at Block 1920000 on 20 July 2016.
The un-forked version of the blockchain is maintained as Ethereum Classic.