If you’re new to cryptocurrency, you’ll probably spend time working out which is the “best” one to own.

This is a red herring, says Matt Hougan, head of research at Bitwise Invest. You wouldn’t say you want “the best software” or “the best app” - you’ll want the best software or app for your particular use.

All cryptocurrencies are based around blockchain technology, but each one is very different - and so each is a potential winner in its sphere.

Bitcoin is optimized for security, so it makes perfect digital gold. Others like Ripple are speedy and private and so are suited to being payment vehicles.

Ethereum was the first blockchain platform optimized for making digital contracts that go beyond being simple payments. What does that mean?

Some background: Use of blockchain technology could eliminate a lot of problems involving human trust and judgement that bedevil the financial industry. In its place would be “decentralized finance” or DeFi.

In a traditional escrow payment, for example, a bank or lawyer or intermediary holds funds in an account while the seller and buyer agree to transact.

Ethereum’s blockchain achieves this without the need for third parties like banks or lawyers - and their high fees.

But Ethereum can handle much more complicated transactions that play out in time and may involve the consent of several parties. This is why the phrase “programmable money” has been used to describe the platform.

It’s important to distinguish between Ethereum the platform, and Ether: the cryptocurrency. Ether can be bought and used on the open market as a currency (second only to Bitcoin). It is also used to run applications on the Ethereum platform.