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Most Important Difference between Cryptocurrency and Ethereum

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Difference between Cryptocurrency and Ethereum

For the most people, Ethereum and Cryptocurrencies are basically the same. But there are slight differences in how they work and what they can be used for. It is actually important to know these differences. They could be the deciding factor in becoming widely accepted or forgotten. So if you want to dig deeper into this subject or even trade with it, this can decide about success or failure. But before we can explain the difference between Cryptocurrency and Ethereum lets first explain cryptocurrency.

What is a Crytpocurrency

It is a subset of digital currency and is used as an asset for exchanging. So it uses hashing to secure its transaction. So they are based on the Blockchain Technology. Therefore it is decentralized and isn´t controlled by a third party like a bank.

So, they are not coins in the strict sense. They are certainly assets. So they have value and can be sold for money. They can compare to gold. Not everybody accepts gold when you wanna trade with them. But it has still the same value all over the world.

What is Ethereum?

Ethereum is a cryptocurrency and also a platform for smart contracts and decentralized applications (DApps). This includes an open peer-to-peer network using the Blockchain Technology. So it allows us to create all types of applications. As a cryptocurrency you can use it for trading, investing, exchanging or buying stuff.

An example for better understanding

Bitcoin, for example, can be compared to money. You can only use it for trading, investing or buying stuff. But Ethereum, on the other hand, can be compared to gold. Gold has a specific value you can trade with. But it also has the opportunity to be used for making jewelry, electronic parts and so on. The same applies to Ethereum. You can use it like Bitcoin for trading and exchange. But you can also craft and create things with it. For example Smart Contracts or DApps.

What is the difference between Cryptocurrency and Ethereum?

Ethereum is a type of cryptocurrency. Just as there are different types of currencies. For examples such as the euro and dollar. The same applies to cryptocurrencies. So every Ethereum coin can be a cryptocurrency, but not every cryptocurrency is an Ethereum coin.


So cryptocurrencies are a subset of digital currency. And Ethereum is subsets of cryptocurrencies. So as the Dollar is a type of currency, Ethereum is a type of cryptocurrency. To continue the thought, Tokens are also subsets of Coins. The following picture shows the structure:

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