What is Ethereum?

Part 3: What is Ethereum?

If you've heard of Bitcoin, you've probably heard of Ethereum. It is the second largest cryptocurrency after Bitcoin. It is also a decentralised computing platform that can run many applications such as DeFi and NFTs. 

What is Ethereum?

Ethereum was launched in 2015 as a data platform, unlike Bitcoin which was launched as a currency. Ethereum is used to build everything from financial tools and games to complex databases. It is therefore a cryptocurrency that is very popular among programmers!

Ethereum foundation is a non-profit association that explains the cryptocurrency as a tool to "codify, decentralise, secure and trade almost anything."

The difference between Ethereum, Ether and ETH

There are a few abbreviations you need to know if you are going to use Ethereum. Firstly, Ethereum is the name of the network itself. The actual cryptocurrency used in the Ethereum network is called "Ether". This is shortened to "ETH" and is what you normally call its token. 

About you look at both BTC and ETH, they work almost the same way in sending, receiving and storing its value. They have similar functions, but what stands out about ETH is that users pay fees with it to execute smart contracts.

ETH is said to be Ethereum's fuel to keep the system running, which is why it is called gas in the Ethereum universe. You pay including "gas charges" for making transactions with ETH.

What is an Ethereum worth?

To find out the value of Ethereum, you need to check the price against another currency or cryptocurrency. It is usually said that Bitcoin is digital gold while Ethereum is digital oil, and it's quite fitting since Ethereum is the second most valuable cryptocurrency.

If you want to check trading prices, you can do so via TradingView. It's a great place to keep track of prices between ETH and other financial instruments. 

You can check the value of ETH against SEK by clicking here!

Is Ethereum safe?

Ethereum is at least as secure as Bitcoin because both are secured by separate blockchains. This means that a huge computer network of users verifies and controls all transactions made on the network. This makes it virtually impossible for a third party to corrupt a transaction. 

Ethereum is also, like Bitcoin, open source so that computer scientists and cryptographers can examine all aspects of the security of the network.

All About Ethereum XBT at Avanza

Avanza offers trading with ETH and that contract is called XBT. They say on its website that the contract is associated with risk and that one should only invest in it if one is prepared to lose all the capital invested. This is because you can trade on both rising and falling prices.

When you trade Ethereum XBT, you do not own Ethereum, but you do own contracts on the price. It is just like when to trade with Bitcoin XBT, except this is for Ethereum instead. 

Ethereum XBT is also traded on the Stockholm Stock Exchange First North which is issued by the XBT provider. 

What does Ethereum XBT charge?

When you trade with this contract, you pay a brokerage fee. This is the difference between the buy and sell price so it means that the fee always varies. However, the absolute lowest cost is SEK 19 per trading session. Below are the other specifications:


  • Annual fee: 2.5%
  • Leverage: 1
  • Interest rate rebate: No 


What is Ethereum 2.0?

It is a major upgrade that has enabled greater growth of the network while increasing security, speed and efficiency. The upgrade started in December 2020 and took two years to be activated. 

The first network is still active alongside Ethereum 2.0, but the idea is to merge the two networks in June 2022.

Why is an upgrade necessary?

In addition to better security, the upgrade is also due to the fact that the "Proof of Work" function under the first network created higher fees and consumed too many resources. Ethereum 2.0 will help the cryptocurrency minimise this and continue to develop for the better.