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What Is Ethereum, for Traders

Ethereum is a network of computers that runs programs, and ether is the coin that pays for running them, the second-largest cryptocurrency and a CFD symbol, ETHUSD, on most platforms. This paper shows what the network does, what gas is and what a transfer costs in the coin and in dollars, how a sixty-dollar move plays out at three lot sizes, and which five lines of the Specification to read. After reading it you can tell the coin from the network, say why a CFD pays no gas, and read ETHUSD's size, margin and hours at your broker.

Difficulty
Intermediate
Reading time
5 min
Pages
8
Reviewed by
Saman Rahbar

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Ethereum, in five lines

Ethereum is the second-largest cryptocurrency network, and ether is the coin that runs on it. Where bitcoin's ledger records transfers, Ethereum's also runs programs, and ether is what pays for running them. Its price is in dollars per coin; this paper uses 3,000.00 as a round example, because this library holds no ether bars. A coin splits to eighteen decimal places, and on a platform one lot, the unit of size, is one coin. Gas is the fee for using the network, paid in the coin. On a platform the symbol is ETHUSD, and traders use the two names, Ethereum and ether, for the same thing.

A machine fed by a coin

Picture a machine fed by a coin. Ethereum is a network of computers that all run the same programs, written once and copied everywhere, and every run of a program costs a little of the coin. That cost is called gas. Bitcoin's ledger keeps a list of transfers; Ethereum's ledger also keeps and runs programs, and the coin is the fuel that pays for the machine time. That is why ether has a price beyond being a coin: it is what the machine takes.

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